Thrift banks cheer BSP move raising capitalization levels

Thrift banks cheer BSP move raising capitalization levels
By Michelle Remo
Philippine Daily Inquirer
First Posted 21:19:00 03/09/2011

MANILA, Philippines—Competition in the country’s thrift banking industry is already stiff and the entry of new players may have an adverse rather than beneficial effect, industry officials said Wednesday.

As such, the Chamber of Thrift Banks (CTB), the umbrella organization of thrift banks in the country, said regulators moved in the right direction by effectively discouraging the entry of new industry players via the imposition of higher capitalization requirements for entities wanting to enter the sector.

“Competition in thrift banking continues to heat up as commercial banks go into our niche market,” CTB president Patrick Cheng told reporters.

Therefore, Cheng said, entry of more competitors in the thrift banking sector indeed has to be addressed.

As banks become more competitive, more of them offer new products and services to reach out to more clients. Consistent with this trend are recent moves by universal and commercial banks to tap smaller corporate and individual clients who used to be largely serviced by thrift banks.

This is the reason existing thrift banks said discouraging more competition, such as by making it more difficult for new entities to enter the thrift banking industry, is a welcome move.

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