"We expect to grow in terms of deposits, loans and resources by at least 15 percent this year," said Senen D. Glorioso, incumbent president of the Rural Bankers Association of the Philippines (RBAP).
He said the optimism is backed by the industry’s maturity in introducing more banking products beyond the traditional planting cycle in the rural areas, while expanding and improving existing consumer or retail banking products.
The industry has also been adopting to the technological era using more software and hardware that increase efficiencies, reduce cost, and increase earnings.
"Rural banks have managed to stay resilient and competitive against the backdrop of a challenging economic environment," Bangko Sentral ng Pilipinas Deputy Governor Amando Tetangco said.
"Financial indicators point to a fundamentally sound rural banking system: improved profitability; lower cost-to-income ratio; stronger capital base; and growth in assets, loans and deposits," he added.
In terms of total assets, rural banks (RBs) registered a 12.36-percent growth to P100.9 billion last year from P89 billion in 2003.
Return on equity (ROE) grew to 11 percent from nine percent while return on assets (ROA) improved to 1.7 percent from 1.5 percent, exceeding industry average figures.
Deposits grew 13 percent to P70 billion last year from P62 billion in 2003. Lending expanded from P56 billion two years ago to P64 billion last year to register more than 14-percent growth.
Glorioso said that despite rural banks being relatively small and located in "far flung areas", total earnings still advanced to P1.69 billion last year from P1.47 billion the previous year.
"In fact, these are the core strengths and opportunities of rural banks as they become dependable and sustainable sources of credit for small farmers, traders, fisherfolk and enterprises," he added.
The ratio between non-performing assets (NPAs) to total assets slightly declined from a high of 15 percent to 14.9 percent, while total capital increased by 12 percent to P16 billion.