BANK of the Philippine Islands is adding to its network modestly.

BANK OF THE Philippine Islands (BPI) expects to grow its branch network by 20-30 per year as it ramps up spending on enhancing information technology.
BPI President and Chief Executive Officer Cezar P. Consing said the Ayala-led lender is looking at growing its branch network by 20-30 offices annually.
He added that the bank eyes to grow its physical presence modestly as it “makes more sense” to develop and enhance its digital channels.
“Long term, what makes sense for BPI is [going] digital,” Mr. Consing said last week.
“My concern is if we continue to build branches, maybe a hundred branches a year and all of a sudden the digital capability and penetration is so high, we’ll have to reduce our branches.”
To support its digital push, the bank is allotting 6-7% of its revenues to IT, with a huge chunk is allotted for building up cybersecurity.
In five or six years’ time, Mr. Consing said the local banking sector will reach a “tipping point” where banks will have to reduce the number of their branches as more people use digital channels.
“What makes the difference is the cost of smartphones. The moment the cost of smartphones come down to a certain level, all of a sudden, you (clients) can have digital access,” he said. “There will come a time, maybe five or six years from now, where it will be mostly digital and you can reduce your branch size.”
However, banks’ physical presence will not become obsolete, Mr. Consing said, as central bank regulations still require clients to physically show up and submit forms.
“That’s why you still need branches. A lot of KYCs (know your customer) still require physical presence. I think it’s a question of balance.”
Amid its digital spending push, the Ayala-led lender said it will continue to put up more branches through its microfinance lending arm BPI Direct BanKo to support small businesses.
“If you notice, our big branch rollout is in BanKo. But for the main bank and for the [BPI] Family [Savings] Bank, we’re talking 20-30 branches a year,” Mr. Consing said.
In a previous interview with reporters, BanKo President Jerome B. Minglana said the microfinance arm eyes to open another 100 branches by next year to end 2019 with 300 branches as it aims to increase its presence in Mindanao.
BPI reported a P5.98-billion net profit in the third quarter on the back of the double-digit expansion of its net interest income.
The Ayala-led bank’s shares went down by 50 centavos or 0.53% to P93.50 apiece on Wednesday. — Karl Angelo N. Vidal