Sources from the banking industry revealed over the weekend that Citibank has finally narrowed down its short list of three candidate thrift banks to one Mania-based bank.
According to the source, Citibank has not started talking about the terms of its planned acquisition but seeking approval from its head office is a strong indication that it has chosen one from its short list.
Moving to tap the consumer banking market, Citibank has been shopping around for a thrift bank to position itself in the last segment left standing by the slump in the banking sector.
Banking sources said Citibank had evaluated Metro Manila-based thrift banks in the hope of finding one that would fit snugly into its existing business. The hardline pessimism of banks compounded by the thin demand for loans have squeezed the revenue stream of most commercial banks and they have begun seriously pouring into consumer banking in an attempt to diversify their portfolio.
Although no less risky than corporate lending, bankers said consumer banking at least showed some growth amid the banking wasteland charred by the 1997 crisis and the global economic slowdown that depressed corporate performance even more.
Sources said Citibank wants to buy into one of the local thrift banks in a bid to gain a stronger foothold in consumer banking.
According to the sources, Citibank is looking for a thrift bank that already has a license to handle foreign currency deposit units (FCDUs), with the accompanying bank qualifications. Sources said Citibank wants a thrift bank based in Metro Manila where they primary market has already been established.
Citibank’s main business in the Philippines is credit cards where it is ranked number one.
Other foreign banks have gone into consumer banking. At least one other bank, American Express, has bought a thrift bank, Omni Savings Bank.
AmEx managed to get the approval of the Bangko Sentral ng Pilipinas (BSP) for its acquisition and sources said Citibank is following the same tack in order to jumpstart its consumer banking business.
At present, there are 104 thrift banks in the country and 38 of them have FCDU license. – Des Ferriols