STATE-RUN Development Bank of the Philippines (DBP) will scale down its expansion plans as it looks to invest in digitalization and tap more financial technology (fintech) companies.
In a press release on Thursday, DBP President and CEO G. Herbosa said the bank “is looking at scaling down its expansion plans” over the medium term and instead re-channel its resources to widen its reach by investing in technology and enhancing its existing banking infrastructure and systems.
“The current market situation and trends dictate the need to re-evaluate the viability of the brick-and-mortar approach to banking,” he was quoted as saying.
DBP said on Thursday the “re-evaluation of the bank’s strategy” means it will put on hold plans to establish more branches, but the amount of investment involved was not disclosed.
It said the lender will tap fintech companies, non-bank financial institutions (NBFIs), rural banks and available information technology (IT) applications to improve its services.
“DBP views its partnerships with fintech firms, NBFIs, and potential alliances with progressive rural banks as a means to bridge the so-called “last mile” in providing essential banking services especially in the far-flung and unbanked communities,” Mr. Herbosa said.
He said these partnerships helped the lender implement past programs, particularly in accelerating the release of payouts to beneficiaries.
“These collaborations could be a model for future undertakings that would require massive amounts of disbursements to individual recipients in a short period of time,” he added.
DBP has 129 branches with 11 branch lite units and 837 automated teller machines (ATMs) across the country.
The bank was the ninth biggest bank in the country in terms of assets in 2019 with P761.5 billion.
“Moving forward, DBP as a development bank would need to beef up its retail banking capability while catering to its niche of institutional customers such as local government units, water districts, as well as micro, small and medium enterprises,” Mr. Herbosa said.
The bank’s net income dropped seven percent to P1.46 billion in the first quarter after it hiked loan loss provisions amid the coronavirus pandemic. — B.M. Laforga