Thrift banks post high growth

Thrift banks post high growth

WHILE THRIFT banks grew robustly in the past five years, the central bank said reforms are needed to make them stronger institutions.

“Deposits and loans of the thrift banking industry are at historic high levels,” Bangko Sentral ng Pilipinas Governor Amando M. Tetangco, Jr. said during his speech at the national convention of the Chamber of Thrift Banks (CTB) yesterday.

Consolidated deposits rose by 88% to P491 billion as of Dec. 2010 compared to Dec. 2005 while net loans increased by 87% to P345 billion during the same period.

Assets grew by 75% to a record-high P606 billion, while the industry’s capital rose by 47% to P66.8 billion, also a record-high.

“[These] figures are well and good,” Mr. Tetangco remarked.

“I believe the Philippine thrift banking industry will continue to contribute in keeping our economy on the growth track. I say this on the basis of its track record [for the past five years],” he added.

Mr. Tetangco, however, stressed that thrift banks need to continue pursuing reforms so they become better and stronger institutions.

He emphasized “total customer care commitment,” which is achieved through good governance and operating in a “safe and sound manner.”

“While our banking sector remains sound and stable, we should not be complacent. The market landscape continues to shift and change and so should we. And at all times, good governance will be the key to long-term sustainable growth,” Mr. Tetangco said.

In a bid to create stronger institutions, the central bank issued new rules on March 1 that raised the capital requirement for new thrift banks.

Thrift banks that locate their head offices in Metro Manila, for instance, must have a minimum capital requirement of P1 billion instead of P325 million while those in Cebu and Davao, are required to have P500 million instead of P52 million.

In response, CTB and HSBC Savings Bank (Philippines), Inc. President Patrick D. Cheng, in an interview with BusinessWorld said, “we want to maintain our growth path for the past five years.”

He said a “high” single-digit growth is achievable as a double-digit growth will be “difficult.”

Mr. Cheng said new thrift banks might find it hard to comply with the central banks’ new capitalization rules but the “CTB supports the new requirements as capital is the foundation of banks.”

CTB groups 54 of the country’s thrift banks. -- Ann Rozainne R. Gregorio

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