Thrift banks’ assets hit P 943B despite tech challenges

By Ronnel W. Domingo@RonWDomingINQ

September 7, 2023 12:00:00

Thrift banks in the Philippines saw their assets grow by 5.3 percent to P943 billion as of end-May despite the challenges posed by new technologies and competitors.

According to the Chamber of Thrift Banks (CTB), the industry segment faced the complexity of adopting digital technologies, including worries about cybersecurity, heightened competition from financial technology firms, the need for internet literacy, and evolving regulatory requirements.

"The past year has been marked by a positive trajectory in the thrift banking sector's performance," CTB president Cecilio San Pedro said in a statement.

"Despite external challenges, the industry has managed to not only maintain its stability but also achieve substantial growth across various crucial metrics," San Pedro said.

CTB attributes the growth in assets to their members' focus on deposit mobilization, which has led to increased resources and overall stability.

During the period in review, thrift banks' core lending activities jumped 14.6 percent to P616 billion from P537 billion a year before.

San Pedro said such growth showed thrift banks' efforts to serve a niche market, including lending to small- and medium-sized enterprises (SMEs), housing and consumers.

Proactive approach

The nonperforming loan ratio of thrift banks "remained manageable" at 7.19 percent, which CTB attributed to their proactive approach to risk management and asset quality.

Deposit liabilities grew by 4.7 percent to P713 billion from P681 billion a year ago. At the same time, total capital jumped by 12 percent to P151 billion.

The CTB president urged thrift banks to bolster their digital infrastructure, develop user-friendly mobile apps and implement innovative solutions to be able to draw from a range of growth opportunities.

"Favorable regulatory changes can fuel innovation, while a strong commitment to data security and privacy will bolster customer trust," he added.

Further, San Pedro said thrift banks could also focus on supporting SMEs, dive into sustainable finance endeavors, explore international expansion and champion financial inclusion by designing accessible products for marginalized Filipinos. INQ