City Savings Bank targets 20-30% profit growth

ABOITIZ-LED City Savings Bank Inc. (CSB) is eyeing to grow its bottom line by as much as 30% this year, its chief executive said, as it continues to bolster its operations in Mindanao.

The thrift lending arm of Union Bank of the Philippines ( UnionBank) said it is aiming for an income growth of at least 20- 30% this 2017 by strengthening its partnership with its outsourcing service provider PETNET Inc. through its branches situated in the Mindanao region.

“In the first two months [ of the year,] we’re on track with our budget. We hope to end the year... 20% higher than last year,” CSB President and Chief Executive Officer Catalino S. Abacan told BusinessWorld on Tuesday on the sidelines of the Chamber of Thrift Banks’ annual convention.

“20% [ is] the minimum that we’re projecting versus 2016, [so around] 20-30% [this year].”

Asked how the bank will be able to hit its growth goal, Mr. Abacan said, “Ang aming focus ay (Our focus is) Mindanao, [ because it’s an] untapped market. Nobody dares to go there as far as our market is concerned.”

The bank’s chief said CSB will continue to enhance its collaboration with PETNET by leveraging on the money remittance firm’s branches also located in Mindanao, “and then with the aid of technology again… we are very positive.... Kumbaga, may cluster of branches sila (It’s like they have their own cluster of branches). We’ll make use of that, we’ll equip them as well,” he said.

According to Mr. Abacan, CSB has around 12 branches situated in Mindanao.

In 2015, Aboitiz Equity Ventures, Inc. (AEV) acquired a majority stake in PETNET, buying 51% of the firm in a P1- billion deal.

PETNET earlier said it was poised to enhance CSB’s loan book as it sought to expand its reach in the local market through an existing tie-up with the thrift lender on salary loans.

The outsource service provider was earlier established to grow the branch network of Western Union in the country. Its branch network is focused on services of Western Union with products such as bills payment and money exchange.

In 2013, UnionBank took over CSB in a move that consolidated the Aboitiz’s banking ventures under one company. CSB is also majority-owned by AEV and its food unit, Pilmico Foods.

UnionBank saw its net income reach P10.1 billion at end-2016, up 67.3% from the P6 billion profit it booked in 2015, on the back of an expansion in its total loan portfolio.

Shares in UnionBank gained 15 centavos or 0.19% to end at P79.85 apiece on Wednesday.