City Savings Bank bullish on 2017 growth prospects

ABOITIZ-LED City Savings Bank, Inc. (CSB) is bullish on its growth prospects for this year as it expects provide a stronger support for its parent bank, Union Bank of the Philippines (UnionBank), moving forward.

“We’re very bullish about City Savings [and] that we will be able to contribute our fair share to the bottom line of the parent,” CSB Executive Vice- President Jose Levi S. Villanueva told BusinessWorld when asked for the bank’s outlook for this year.

The thrift banking arm of UnionBank earlier said it is on track to hit as much as 30% growth in its earnings for this year after its net profit expanded by 31% in the first quarter on the back of robust loan releases.

Catalino S. Abacan, City Savings president and chief executive officer, had previously projected that the lender’s bottom line will increase by at least 20-30% by end 2017 on the back of an enhanced partnership with outsourcing service provider PETNET, Inc.

In 2015, Aboitiz Equity Ventures, Inc. acquired a majority stake or 51% of PETNET shares under a P1-billion deal. PETNET is now the conglomerate’s money remittance firm.

PETNET is expected to boost CSB’s loan portfolio, while the remittance firm is seen to expand its presence in the market through an existing tie-up with the thrift lender on salary loans.

Aside from his bullish outlook for the bank this year, Mr. Villanueva said UnionBank’s bancassurance partnership with local life insurer Insular Life Assurance Co. Ltd. (Insular Life) will be another platform through which the thrift lender can produce capital for the year, with CSB to formulate a new insurance product for its target client market: teachers.

“That opens up another opportunity for us to generate revenues kasi kasama kami sa bancassurance ( because we’re included in the bancassurance partnership), so we’re creating a product that is meant for teachers...[for them to partake] and participate in the investment products of Insular [Life,]” he said.

Last January, UnionBank sealed a 15-year bancassurance agreement with Insular Life. Bancassurance refers to the selling of insurance products within bank branches.

UnionBank, along with CSB, bagged the approvals of the Insurance Commission and Bangko Sentral ng Pilipinas to sell Insular Life’s insurance products last March 8 and April 4, respectively.

UnionBank saw its bottom line reach P2.21 billion in the January to March period, a 37.24% jump from the P1.61 billion booked in the same period in 2016.

Shares in UnionBank gained 60 centavos or 0.71% to close at P85.15 apiece on Friday.