China Bank Savings shifts lending focus to SME

MANILA, Philippines - China Bank Savings (CBS) is in the tail end of its consolidation phase, and is launching the next level of its expansion program.

CBS is the thrift bank subsidiary of China Banking Corp. which is a member of the SM Group.

CBS president Alberto Emilio V. Ramos said they are moving for another 20 branches, with an aggressive stance towards three in the Visayas and another five in Mindanao.

The rest will be in Luzon and several restricted areas in Metro Manila.

The number of branches will not dramatically surpass the present 166 as some rationalization and adjustments are necessary related to the incentives it received for acquired Planters Development Bank (Planters Bank).

Some of the new branches will be located in SaveMore outlets, in CityMall, and others in SM malls.

Thus, a conservative year end 170-fully operational branch network is easily achievable.

By the end of March this year, its loan portfolio mixed has shifted from 75-percent portfolio share in favor of consumer loans and 25 percent for small and medium enterprise (SME) to 65 percent in favors of SME loans and 35 percent of consumer or retail loans.

“In fact, we have moved several SME accounts to the commercial bank as asset and portfolio size has attained middle-market status,” Ramos said.

A new SME transactional program has likewise been introduced to help entrepreneurs raise their level of profitability higher and more sustainable. “We are also introducing middle market or commercial bank-like applications for the SME borrowers,” Ramos added.

At the same time, its new core banking system will be fully operational within the second semester.

CBS also partnered with Voyager Innovations, the digital innovations unit of PLDT and Smart Communications Inc. (Smart), for Lendr, the country’s first online marketplace platform for consumer loans.

Lendr is a fully digital, multi-channel, telecommunications and bank agnostic solution that financial institutions and credit providers can use to reach consumers planning to avail of loans. 

With Lendr, any consumer can apply any time whenever they need money for emergencies, minor house repairs or school tuition via SMS, mobile app or online with any device or telco provider. 

Consumers are in full control as they can keep track of their loan application status, loan repayments and amortization schedule.

Meanwhile, the thrift bank has been introducing 10 insurance products via its bancassurance partnership with Manulife China Bank Life Assurance Corp. (MCBLife).

The insurance products will be tailor-fit to the thrift bank’s clientele profile for reasonably or popularly priced to fit the C and D population, including low-premium protection products, savings and protection, and low-placement investment and protection insurance products.

“If you watch the type of customer base of SaveMore outlets, that is the C and D group,” the bank president said. “This supports our goal of providing them with a comprehensive range of financial products and services to suit their evolving savings and investment needs.”

Aside from the already in circulation debit cards, CBS will offer a co-branded credit card for its target market.

In the first quarter of 2016, CBS reported a 13.53-percent growth in its loan portfolio in the first quarter of 2016.

Consumer loans comprised of 20-percent mortgage loans, 14 percent auto loans, and the balance of 66 percent to various forms of personal loan.

Total deposits meanwhile grew to P65 billion or over six percent better than the P61.16 billion after three quarters in 2015.

Total assets ballooned to P77.1 billion and capital base at P6.3 billion.