Metrobank wants to be the best, not just the biggest

Last month, Arthur V. Ty was named president of the Metropolitan Bank and Trust Co. (Metrobank), the country’s biggest domestic commercial bank. He takes over the post held for 14 years by Antonio S. Abacan Jr., who was named chairman of the bank. It was under the watch of Abacan that the bank took the top spot and has since never looked back.

The Philippine STAR was able to arrange an exclusive one-on-one interview with the youthful Ty, and it turns out that The STAR is the first local publication that was granted the request.

The Philippine STAR: What is your vision of the bank say three to five years down the road?

Arthur V. Ty: We are already the biggest bank in the country, so now we want to be the best. What we are doing now is undertaking a lot of the changes. What we have, moving forward, is really geared to achieving a certain standard of excellence. We want to have a good look at the risk side, the long term viability, and whether the returns are sustainable. It is easy to show returns in the short term, but neglect to prepare for the long term. It is a question of balance.

To be the best, it is no longer enough just to be the biggest. It means being recognized as the industry leader by all of our stakeholders, i.e., our customers, our employees, regulators, and shareholders.

PS: Being the leader in the industry for roughly 12 years and keeping that spot is probably harder than trying to get to be number one. How do you look at that situation?

AVT: Remaining number one (for a long time) is also building a lot of complacency. How hungry were you to get to number one, and now how hungry are you to keep that lead. I would rather have people that are self-motivated, empowered. But to get there, you must make sure they know what they are doing, that they are well-equipped, well motivated, and that they can work together. That is the biggest challenge. Everything else will fall into place as you can count on momentum, you can count on your position.

For the bank’s programs to work on the ground, you have to get to the top. If the top does not think the same way, you will never get to the ground. On the other hand, if you work on the ground with success, but the top does not feel the same way, you will have a mutiny. It is a matter of balance. But so far, my thinking is that I will start work from the top going down. It is a combination of opportunities to excel, to learn, to be rewarded, and to be penalized.

There must be constant communications and feedback, from the top to the ground, from the ground to the top. You have to create an environment that fosters a certain philosophy, and a certain mindset. It is not an human relations issue, it is a leadership issue. And not just the president of the bank, but also the head of a department, the branch head.

You have to get them motivated, get them engaged, get them excited. It is a long process, but I have started.

PS: Like most banks, Metrobank has already made the necessary adjustments based on the new international accounting standards (IAS). Will adjusting to the requirements under Basel II make a big difference?

AVT: We have put up a team that will specifically study and understand how it works, and how it will be the impact on the bank. There could be changes in capital, which will dictate how the bank will conduct its business, the way capital will be allocated, and it will push the bank into certain areas to reduce exposure on others, and depending on how much capital exists. But I expect changes in operating, strategy, and credit. It will force the bank to a certain type of behavior.

PS: Entering the Basel II environment requires a lot of information gathering. Will that be part of your program?

AVT: We have been working on accurate decision-making and information gathering. Our capabilities today on being able to look at information we already have, and putting some structure into that so that it becomes useful data, is a lot better. We are at a point that decision systems are becoming really useful, and ready to be used. So moving forward, we can and must rely on that information more. It is also something that we can use for Basel II requirements, for the bank’s marketing strategy, and reportorial requirements. Available technology is far advanced than our knowledge on how to maximize it. It is a learning process.

PS: What role does technology play in all your plans?

AVT: The four key roles that technology plays are: to help in decision-making; automation and efficiency; reach including the different channels like phone and Internet banking; and control. No bank can grow without technology, which can multiply the effort put into it. Our capabilities on being able to look at the data and information we already have, and putting some structure into that so that it becomes useful data, is a lot better today. It is also something that we can use for Basel II, marketing, and reportorial requirements. Technology today is far advanced than our knowledge on how to maximize it. It is a learning process.

PS: Is Metrobank still in the acquisition mode, given the way other key competitors have expanded through acquisition?

AVT: We will stay focused on what we need to do. Where there are opportunities we will also look it up. We look at an acquisition from a strategic perspective. If there is a fit, you can compliment, or you can supplement it. If you find a bank that is strong where you are weak, or maybe you can find a bank that improves the market share that you already have. We have learned a lot from the last acquisitions we made.

PS: Metrobank has the largest nationwide branch network, will there be still room for more or are you looking at new forms?

AVT: Metrobank has 561 branches plus the 100 of the Philippine Savings Bank (PSBank) and 8,000 employees. Branches is an access point, a touch point. It will remain an important, integral to Philippine banking as the public still prefer face-to-face, rather than electronic, interaction. There is room for electronic, non-branch banking transactions as long as you can segment your market. Maybe specialized branches in certain areas. Technology will again play a major role here especially in the remittance market.

PS: Yes, Metrobank has been a major force in the remittance business from overseas Filipino workers (OFWs) and migrant workers. What will the public expect moving forward?

AVT: We are looking closely at our local distributions. With this bank, there is no such things as being content. We are always looking for new ways. Competition today is moving away to non-banking institution, channels, both collection and distribution. There are a lot of businesses mushrooming like mom-and-pop stores, but collectively they are becoming quite a competitive force. Technology once again is very important in this respect. Forging alliances is another important area. We have a lot of successful joint ventures, and I am proud to say that they are happy with us.