Citystate Savings targets 50% net income growth in 2003

Citystate Savings Bank is content to grow by a "modest" 50 percent in terms of net earnings for the whole of 2003 although doubling last year’s performance is still deemed as achievable.

Last year, net income grew by a whooping 167 percent from P8.87 million in 2001 to P23.71 million last year.

There are positive signs that the 2003 net income target is achievable with the thrift bank’s strong performance in the first three months of 2003.

Net income grew by 133 percent, or from P4.1 million in the first three months of 2002 to P9.6 million in the same period this year.

Main drivers of the outstanding growth are consumer loans, treasury gains, earnings from disposal of bad assets, and deposits.

To support its strong income growth for the year, Citystate Savings Bank will co-launch a credit card, open a microfinance branch, open more branches, activate more automatic teller machines (ATMs), introduce more products, and improve on its consumer loans.

"The bank is also open to making acquisitions and increasing its capital base," Rey D. Delfin, Citystate Savings Bank executive vice president said. "The long term strategy of course is to attain the commercial bank status."

By the end of March this year, loan portfolio grew by 240 percent to P859 million versus the P356 million in the same period last year. Deposits likewise grew by 47 percent to P676 million this year from P460 million in the first three months of 2002.

Non-performing loans (NPLs) remained manageable standing at 4.65 percent of total loan portfolio while loan loss provisioning stood at a respectable 38 percent.

Total resources grew from a little over P1 billion to P1.2 billion by end 2002. It reportedly stood at P1.13 billion by the start of April as the bank continued to hike provisioning for possible losses.

Citystate Savings Bank has also sought the nod of the Bangko Sentral ng Pilipinas (BSP) to establish a microfinance branch in Balagtas, Bulacan. The BSP has offered incentives while lifting the moratorium on branch expansion to encourage financial institutions to establish microfinance-oriented activities.

Delfin confided that they are also looking for other cities within Metro Manila for similar activities. "Quezon City is the more promising areas in Metro Manila," he said.

The thrift bank is also looking at areas outside Metro Manila to open new banking branches and offsites for its ATM network. It already operates 12 branches and a little more than a dozen ATMs both in its branches and offsite.

Meanwhile, the bank expects to launch this month its first credit card with JCB International as part of its build-up in the consumer banking market.

It continues to enjoy relative gains in its jewelry loans market, which is another form of salary loan. In fact, it has reduced interest rates to between one to two percent versus the market rate of pawnshops of an average four percent. "That market represents one-fifth of our lending market base," Delfin pointed out. – TPT