CITYSAVINGS Bank, Inc., the thrift banking arm of the Aboitiz-led 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 micro-focused 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 branch-lite 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 cash-based 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 magse-set 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. — Karl Angelo N. Vidal