SMEs, teachers key to thrift bank’s growth
A subsidiary of Aboitiz-led Union Bank of the Philippines (UBP) is banking on the growth of the teachers’ market and rapid expansion of small and medium enterprises to further grow its business this year.
CitySavings president and chief executive officer Catalino Abacan looks forward to growth in the remaining half of the year, on the back of the education department’s announcement to hire more teachers to support the K+12 education system.
“We remain positive. The more teachers there are, the more business we will get,” said Abacan.
Salary loans remain the most in-demand loan product that teachers have availed themselves of at CitySavings. CitySavings is the thrift banking arm of UBP.
The bank has projected it will sustain year-on-year growth of about 20 to 30 percent this year through outsourced financial services provider Petnet, a focus on its Mindanao business areas and microfinance business plans, and further development of other products such as its pension loans.
CitySavings also announced it will carry out digital transformation initiatives, such as enhancing its corporate website and improving its “loan ranger” technology and LoansHub 2.0 system.
Abacan said he also sees growth in their SME business following UnionBank’s full acquisition of the 11-branch First-Agro Industrial Rural Bank (FairBank) last December. The acquisition marked the financial conglomerate’s foray into rural and microfinance banking.
“While we handle more the needs of the teachers’ market, our acquisition of FairBank will take care of the needs of our SME sector,” he said. FairBank has more than 10,000 borrowers and a depositors’ base of over 20,000.
Microfinance loans are small loans granted to the basic sectors on the basis of the borrower’s cash flow, as well as other loans granted to the poor and low-income households for their microenterprises. These loans are typically unsecured.
According to the Bangko Sentral ng Pilipinas (BSP), the average microfinance loan in the Philippines is about P25,000 but the loan can be as low as P2,000 and as high as P150,000.
Microfinance loans amounted to P11.7 billion as of June 2016, almost five times the 2002 level of P2.6 billion.