"First half deposit base grew satisfactorily or close to a 100 percent. We are ahead of our forecast," said Peter Yeates, HSBC head of personal financial services.
Having been established just about 17 months ago, a huge amount of consolidation and conversion was undertaken. "That is the reason we did not expect to make profits in the first year. When you are moving from an investment period, you will probably register a net loss," Yeates said.
HSBC acquired PCI Savings Bank last year and renamed it HSBC Savings Bank. With the existing 16 branches, HSBC undertook a major "face lifting" effort to design the branches based on its international standards.
Yeates said that making profits in the first year was the least of their concerns.
"We are ahead of plan in most sectors of our activity, in terms of profitability. However, we did not plan to be profitable in our first year of operation. Since we were investing heavily on the business, we were happy to make profits in the first year," he said.
HSBC completely changed the entire system of the old branches, which is part of the overall refurbishing. It invested heavily among others on new equipment, new computer hardware, new software, new personal computers, training, and relocated branches.
Of the total 16 branches, they relocated five branches in the first six months and expanded it "in an environment where the customers can discuss their investment requirements."
Its home loan portfolio has been growing despite the steady decline in lending rates. The continued lowering of the rates was due mainly to strong competition from banks focusing on the consumer market.
This favors the consumer although bankers swear that they have positioned themselves without excessive exposure and sufficient provisioning.
"The loan demand is relatively steady. People are generally cautious about taking in more credit with the general environment today. There is a lot of liquidity in the market," Yeates swears.
HSBC Savings Bank has a single digit non-performing loan (NPL) ratio, which is way below the industry average of 14.3 percent in the thrift banking sector.
Earlier, HSBC (Phils.) chief executive officer and HSBC Savings Bank chairman Peter J. Lawrence said that the savings bank would raise the quality of competition in the Philippine thrift savings bank sector. – Ted Torres