CEBU, Philippines – Even with the low forecasts for the country’s growth this year, local banks continue to be stable and well-capitalized, said a banking industry executive.
“Banks continue to be well-capitalized and they are still coping even with the financial situation. Most did better over the previous year. For our bank, we have performed better than expected this year over the same period last year,” said Allied Banking Corporation president Anthony Q. Chua in an interview.
He shared that with the previous situation encountered by the financial sector due to the global financial crisis, banks nowadays have become very conservative.
“Philippine banks now are very cautious because of the worldwide financial disaster. They want to protect their banks to have sound financial standing,” said Chua.
He said that in order to surpass the adversities hounding the sector, banks must go back to basics.
“Banks must provide the service that customers look for and they must aim to provide the returns that stakeholders expect,” said Chua.
He said that the industry’s trend for loan borrowing remained stable because the corporate market segment continues to look for financing.
“There are still many projects that need bank financing and banks continue to lend although not as much as they like because they also look at current economic situation,” said Chua.
He said that their loan portfolio for Allied Bank continues to grow as they were able to still maintain their credit standard.
“We are active in market segmentation for capital markets and we continue to serve clients in their loan requirements,” said Chua.
He said that in terms of financing micro-entrepreneurs, Allied Bank has collaborated with organizations called conduit facilities that are better in doing micro financing.
Allied Bank according to Chua has a strong Chinese-Filipino market which is mostly composed of businessmen and entrepreneurs.
He said that in terms of diversifying products, Allied Bank continues to promote actively investment vehicles to the market and they have not noted significant decline of this product segment even during crisis.
“The situation is still very fluid right now. We continue to look forward to achieving our growth targets and we are doing the best that we can to manage the crisis as a listed company,” said Chua.
He said that so far, they do not have disclosures for expansion plans and they are not looking at possible merger with smaller banks even if this has so far been the expansion trend for most banks in the country.
Chua said that in expansions, most banks are very conservative that most postpone their expansion plans to wait until the economy gets better.
“We are not looking at merging and nor expanding through acquisition even if most banks are expanding through mergers,” said Chua.
According to the latest Banko Sentral ng Pilipinas (BSP) first quarter capital adequacy ratio, banks in the country have generated 14.6 percent ratio which is more than 10 percent required by the Central Bank and more than eight percent required by the international standard.
While the non-performing loans are at 4.1 percent compared to the four percent pre-crisis levels during the Asian Financial crisis in 1997. — Rhia de Pablo