Reg’l banking has space for all – Citi executive

Banks in the region regardless of economies of scale, once the ASEAN integration is in full force, will have its own space of operation and time to settle in its own market niche.

“I think every single bank will have a different role in the region be it a regional bank, global bank and local bank,” said Citi Philippines chief executive officer/country manager, Batara Sianturi. “There’s a space for everybody to play because I don’t think there’s a single bank that can play in all space in terms of financial inclusion.”

Sianturi, speaking as panelist in a forum hosted by Hong Kong-based The Asset financial magazine, said Citi as a global bank (Citibank N.A.) has been happily entrenched in the Philippine banking market for 112 years and they have always had a different target market.

“I don’t think we are going in the same target market (compared with local banks). There is some overlap but we focus mostly on MNCs (multinational corporations). We’re in Metro Manila only and we only have five branches in the city. Again, there’s a space for everybody and BSP (Bangko Sentral ng Pilipinas) has been articulating a lot on financial inclusions – pawnshops, mobile money – I think there’s space for everybody to play.”

Sianturi said the Philippines is the first in ASEAN to further liberalize foreign bank entry when President Aquino signed the amended law (Republic Act No. 10641) in July this year. Last week, the BSP approved the rules and regulations that will govern and guide the new foreign banks.

This signals the country’s readiness for banking regional integration by the year 2020. The BSP is part of negotiations that will implement the ASEAN Banking Integration Framework or ABIF which will identify so-called ASEAN banks.

Sianturi said Citi have already set up its ASEAN structure and they have the advantage of a global footprint as well as regional, be it Asia or ASEAN.

According to Sianturi, the most important thing in a regional integrated community is how to connect.

“Citi is in 101 countries and operating in 160 countries so I think global footprint is very important and we believe that globalization is one of the cyclical trend – it’s going to be emerging market with developed market and developed market with developed market and emerging market with emerging market. Those were the trade flows and finance follows trade,” he added.

American bank Citi is one of 14 foreign banks in the Philippines. Established in 1902 in Manila, it is the second oldest international bank after British bank Standard Chartered Bank which set up a local branch in 1872.

Citi is also the first global bank to put up a business process outsourcing operation in the country at a time when there was no call center industry to speak of. Its Philippine BPO serves as its Asia Pacific hub and it has since been expanded from simple customer sales and service into a more value added financial and management reporting center.