Banking on sustained growth
WHEN SM started to become the biggest retail group in the Philippines in the early decades, its founder and now chairman emeritus Henry Sy, Sr. had a vision that he will also create the biggest bank in the country. Now, from merely a savings bank back then, BDO Unibank, Inc. is currently the Philippines’ largest bank in terms of total resources, loans and deposits. SMIC is also at the helm of China Banking Corp. (China Bank).
“BDO, in the last 10 years, has completed offering stock rights of 2 billion US dollars. That’s a hundred billion pesos. And it continues to expand and will be in a good position when the ASEAN integration is fully implemented,” Jose T. Sio, SMIC chairman of the board, told BusinessWorld in a recent interview.
Based on SMIC’s 2016 Annual Report, BDO and China Bank sustained strong financial results that year as they continue their mergers & acquisitions, branch network expansion and technological upgrades, offering a wide range of products and services here and abroad. They have also been cited by different local and international organizations for their corporate governance practices and innovative banking services.
It posted a combined P82.3 billion net interest income on the back of a P1.5 trillion gross customer loans and a P17.9 billion interest income loans, respectively. SMIC’s banking businesses contributed 37% to the group’s P362.8 billion consolidated net income last year.
In 2016, BDO boosted its efforts to tap into growth opportunities across its market segments. It revamped its remittance operations to serve the needs of Filipinos in Japan by beginning its operations of its online trading services, BDO Nomura Securities. Through strategic partnerships, aggressive growth of its branches and distribution networks, the bank also expanded its banking and financial services.
Meanwhile, in the same year, China Bank remained to be one of the top banks in the country and the sixth largest private universal bank in terms of assets. “Its strong financial performance in its 96th year in Philippine banking was a result of the bank’s focus on its strategy of delivering significant growth in major market segments and its commitment in striving to be the best bank for its clients,” the report said.
For the first quarter of this year, BDO recorded a net income of P5.8 billion, up 6% from 2016. Its earnings were driven by the P18.4 billion growth of net interest income, backed by the firm’s 21% hike in customer loans and 13% increase in deposits. It has already opened 1,126 branches which provide longer banking hours, with its mall- based branches operating on weekends.
China Bank, with 548 branches, for its part, announced a P1.5 billion net income in the first quarter, up by 6% compared with 2016. Its net interest income increased by 14% to P4.5 billion, supported by total deposits of P530.5 billion.
True to SM’s commitment in ensuring continued growth especially in banking, SM’s Harley T. Sy, now executive director of the board, said: “We will continue to take advantage of the country’s growth opportunities and focus on emerging regions of the Philippines. We will maintain successful client relationship management and strengthen our businesses to sustain our growth trajectory.” —