Ci­tySav­ings plans branch-lite units, acquisitions

Business World - - BANKING & FINANCE - Karl An­gelo N. Vi­dal

CI­TYSAV­INGS Bank, Inc., the thrift bank­ing arm of the Aboiti­zled UnionBank of the Philip­pines, is lever­ag­ing on the sim­pli­fied bank branch con­cept as well as more acquisitions to reach more un­banked Filipinos.

In an event or­ga­nized by UnionBank in their new “con­cept branch” named The ARK in Makati City, Ci­tySav­ings Chair­man Eu­gene S. Acevedo said they will be con­vert­ing their mi­cro­fo­cused bank­ing of­fices and other bank­ing of­fices (OBO) into “branch-lite” units.

“What’s go­ing to hap­pen first is all our mi­cro-fo­cused bank­ing of­fices and OBOs will be con­verted into branch-lite. That’s go­ing to hap­pen soon,” Mr. Acevedo told re­porters on Tues­day.

In De­cem­ber, the Bangko Sen­tral ng Pilip­inas ap­proved the op­tion for banks to set up branch­lite units, a smaller and sim­pli­fied ver­sion of a brick- and- mor­tar bank branch which can be placed in towns and cities which are un­banked or un­der­served.

“Prob­a­bly within the next three months, we should have 35 branch-lite of­fices,” Mr. Acevedo said, adding that the bank is look­ing at adding an­other 20 lite branches.

Aside from con­vert­ing Ci­tySav­ings Bank’s OBOs into branch- lite units, UnionBank Pres­i­dent and Chief Ex­ec­u­tive Of­fi­cer Ed­win R. Bautista said the thrift bank is in talks to ac­quire other ru­ral banks.

“Our strat­egy is to pur­sue ex­pan­sion in City Sav­ings through acquisitions. Yes, we’re in talks with ru­ral banks kasi ang ku­lang na lang ( be­cause what is lack­ing) is the pen­e­tra­tion in the ru­ral ar­eas,” Mr. Bautista said.

Mr. Acevedo con­firmed this, adding that there are many mi­cro­fi­nance-fo­cused thrift banks and ru­ral banks that are think­ing of be­ing ac­quired.

“Given our record of con­sec­u­tive acquisitions, [it is] likely to con­tinue,” Mr. Acevedo said.

Last month, Ci­tySav­ings an­nounced the sign­ing of a share pur­chase agree­ment with the Ropali group to fully ac­quire the Is­abela-based PR Sav­ings Bank.

PR Sav­ings is fo­cused on mo­tor­cy­cle, agri- ma­chin­ery and teach­ers’ salary loans, serv­ing over 131,000 bor­row­ers, mostly from the mass mar­ket seg­ment.

Aside from this, Ci­tySav­ings also an­nounced this week its ac­qui­si­tion of PETNET, Inc., also known by its re­tail name PERA HUB.

On Mon­day, it said Ci­tySav­ings, to­gether with Union Prop­er­ties, Inc., is set to ac­quire the 51% stake of trans­ac­tion net­work PETNET.

PERA HUB, with over 2,800 branches, has the largest net­work of West­ern Union out­lets in the coun­try. It of­fers a va­ri­ety of cash­based fi­nan­cial ser­vices which in­clude re­mit­tance, cur­rency ex­change and bills pay­ment.

With the ac­qui­si­tion of PETNET, Mr. Bautista said Ci­tySav­ings can also use the PETNET’s branch net­work as a dis­tri­bu­tion chan­nel for loans.

“[ We could also] use PETNET as a dis­tri­bu­tion chan­nel for loans. Kung hindi kami magseset up ng ( if we will not set up a) branch in that place, they’re al­ways there,” Mr. Bautista said, re­fer­ring to the cen­tral Min­danao re­gion, which he said where the bank “needs to im­prove on.”

Asked if the branch net­work of PETNET can be con­verted into branch- lite units, Mr. Bautista said: “Ac­tu­ally, yes and no.”

“[ What’s im­por­tant] is you have pres­ence of at least one branch in a prov­ince. The rest can be sup­ple­mented by PETNET.”

As of Septem­ber 2017, Ci­tySav­ings was the sixth largest thrift bank in the coun­try in as­set terms with P71.7 bil­lion, cen­tral bank data showed.

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