BDO UNIBANK, Inc. is setting its sights on opportunities for growth in the country’s unbanked population despite the challenging outlook for 2020 due to the coronavirus pandemic.
“We’re still focused on financial inclusion, we still believe that the 70% of the population that is unbanked is still a big potential. Our strategy remains the same although the means to achieve it may actually be adjusted,” BDO President and Chief Executive Officer Nestor V. Tan said in the bank’s virtual annual stockholders’ meeting held Tuesday.
Mr. Tan said he is confident BDO will be able to weather the crisis and assured shareholders that this will not impair their capital, adding that the bank’s capital adequacy ratio is expected to stay stable.
He also said the higher loan loss provisions it set aside is only anticipatory as the lender is not yet experiencing losses.
With digital transactions gaining traction amid the crisis, Mr. Tan said the bank may likely go through some adjustments in its branch and digital services. However, he noted that branch banking still has a role to play, especially in rural areas.
“Gradually, as digital picks up, we will probably see a slowdown in our branch expansion. But at the moment, as we move into the country side, it’s probably premature to say that branches will cease to exist,” he said, noting that branch lite banking is more likely to be a trend in dense, urban Manila areas.
Mr. Tan also noted threats from the rise of e-wallets e-payments, adding that the bank has already invested to boost its digital capacities.
“A lot of them [digital improvements] were supposed to come up this year but unfortunately, we got hit by the quarantine. I think you will see some of them coming towards the latter part of this year,” Mr. Tan said.
He said among these digital initiatives are boosting the bank’s QR code capabilities and the upgrade of its digital banking and information technology platform, as well as improved cybersecurity.
Mr. Tan said 80% of their branches are open during the quarantine period while their head office is manned by a skeletal crew. He added that they have also employed their business continuity model that had dual site processing capabilities in case a virus spread occurs.
Earlier this month, BDO increased its loan provisions to P22.1 billion in anticipation of the worsening impact of the pandemic.
The Sy-led lender’s net income declined by 10.2% to P8.8 billion in the first quarter from P9.8 billion a year ago as its investment portfolio was affected by weak markets.
BDO shares closed at P102.40 apiece on Tuesday, up by P3.40 or by 3.43%. — L.W.T. Noble