Thrift banks expect single-digit growth

MANILA, Philippines - The country’s thrift banking sector is expecting to grow by a modest single-digit level in 2012, a top official of its umbrella group said.

Patrick Cheng, president of the Chamber of Thrift Banks (CTB), the trade organization of the thrift, savings and development banks of the country’s financial system, said that domestically, optimism is growing high as government steps up spending.

“We look forward to the correct balance of both fiscal and monetary policy to help keep the Philippine economy growing at the four to five percent eyed by the National Government, along with personal consumption,” he said.

Last year, the industry’s total assets grew 13.12 percent while gross loans expanded 10.75 percent.

The CTB official said that there is still a lot of space in the consumer finance area which would benefit from improved consumer income and increased distribution points.

“We can expect more players to compete in this space. But for the consumer, all this competition on price and product and services is great. If you have a need and the capability to service debt, now is a great time to borrow,” Cheng added.

The number of thrift banks dropped to 71 last year, or two less than the 73 recorded in 2010. However, the number of branches increased to 1,409 from 1,346 in 2010.

Cheng said consolidation would still continue as capital requirements of the international market as well as the Bangko Sentral ng Pilipinas (BSP) will force players to seek strategic partnerships, revert to a rural bank, or close down.

“Stronger players in the (banking) system gains scale with a commercial and a thrift banks in its system,” said Cheng, who is also president of HSBC Savings Bank.

Meanwhile, total deposits grew almost a percent last year from P490 billion in 2010.

CTB director Rommel Latinazo said that it is one area that needs to be addressed. “Banks have started to introduce new deposit products, but much have still to be done to attract more deposits to fuel loans,” Latinazo, the president of the RCBC Savings Bank, said.

Thrift banks service 4.1 million deposit accounts worth P468 billion as of end November 2011.