Thrift banks post robust growth in 2023

MANILA, Philippines — After thrift banks posted robust growth performance in 2023, the Chamber of Thrift Banks (CTB) is optimistic about the growth prospects of its member-banks for this year amid the opportunities digital transformation brings.

“In the past year, the thrift banking sector, under CTB’s leadership, demonstrated robust performance,” CTB president Cecilio San Pedro said in a statement.

According to CTB, total assets of thrift banks rose by 7.4 percent to P1.04 trillion as of end-December last year from P968.28 billion in 2022.

Thrift banks also saw a 16.3-percent growth to P677.6 billion in core lending, indicating sustained lending activity within the sector’s niches.

Confidence in the sector also remained high, with deposit liabilities growing by 6.5 percent year-on-year to P789.3 billion.

Total capital also stood at P157 billion in 2023, 10 percent higher than last year’s level. Capital adequacy ratio reached 16.98 percent, well above the required minimum of 10 percent.

The non-performing loan ratio of mid-sized banks remained manageable at 6.4 percent, San Pedro said, underscoring the sector’s prudent risk management practices. In terms of profitability, central bank data showed the net income of the thrift bank sector jumped by 13.4 percent to P18.47 billion in 2023 from P16.29 billion in 2022.

The thrift banking sector also saw its net earnings inch up to P4.66 billion in the first three months of the year from P4.65 billion in the same period a year ago.

“Over the past five decades, CTB has faced various challenges and seized numerous opportunities, playing a significant role in shaping regulatory reforms like the Thrift Banks Act of 1995,” San Pedro said.

“We have expanded our mission to promote economic development through savings mobilization and credit extension, particularly to SMEs and the housing sector.”

Moving forward, CTB said it recognizes the importance of digital transformation to ensure the continued success of thrift banks.

With the shift to digital, banks also recognized the opportunities of integrating artificial intelligence (AI) into its operations, which could enhance banks’ efficiency and customer-centricity.

“AI enables thrift banks to revolutionize customer service by tailoring products and services to individual needs and automating processes,” San Pedro said. “This leads to smoother experiences for customers and enhances their satisfaction and loyalty.”

He added that AI holds the promise of unlocking valuable insights from vast amounts of data, empowering thrift banks to make informed decisions, anticipate market trends and mitigate risks effectively.

The CTB will hold its national convention on July 19 at the Dusit Thani Hotel in Makati City.

The gathering of thrift banks carries the theme “Chamber of Thrift Banks @50: AI in Banking,” underscoring the strategic importance of AI in shaping the future of banking.