China Bank allots P1.5 billion for expansion

MANILA, Philippines - China Banking Corp. (CHIB), partly owned by the family of retail tycoon Henry Sy, is allotting P1.5 billion this year for its continued aggressive expansion program in line with its goal to have 300 branches by 2010.

China Bank said half of the programmed capital budget will go to the establishment of 40 additional branches – 30 for the universal bank and 10 for the savings bank under China Bank Savings.

To date, the bank has 216 branches and 326 automated teller machines (ATM) nationwide. China Bank’s expansion was anchored on the integration of the operating branches of the former Manila Bank into the network.

The other half of the allotted budget will be used to beef up information technology which includes a new core banking system, ATM switch and treasury platform.

“For 2009, CHIB is going full steam with its network expansion with a two-pronged approach of beefing up its universal bank branches and launching the first batch of China Bank Savings branches,” China Bank said in documents filed with securities regulators.

Funding for the bank’s capex will come from internally-generated cash, China Bank said.

The Sy Group owns around 34 percent of China Bank — Sysmart Corp., with a 17.1-percent stake, SM Investments Corp., with 16.3 percent; Shoemart Inc., with five percent; and SM Development Corp., with 0.84 percent.

China Bank is looking at sustained lending with stronger focus on quality accounts — with the middle market, consumer, and corporate sector as the main drivers of growth this year. From a 21 percent drop in 2008 net earnings to P2.92 billion, the bank is eyeing a modest 10 percent growth this year, banking on volumes and revenues from new businesses such as cash management, private banking, remittances and bancassurance.

“In a sense, for China Bank, 2009 entails a return to the very basics of banking: building the new banking infrastructure, offering more traditional products, reworking our processes to make them more customer friendly and developing the skills and talents of our people so they can better serve our clients,” the bank said.