Already the thrift bank made a rights offer to the public for better transparency and capital raising for its three-year program.
"It is part of the bank’s corporate mission of good governance and giving more value to our stakeholders," Citystate president Alfred A. Cabangon said.
Cabangon expects a minimum of P250 million from the offer which ,among others, would be used for the acquistion or opening of an additional 38 branches within the next three years.
It has an existing 12 branch network mostly in Metro Manila. That brings the total network to 50 by 2007 where majority of the new branches would be located outside Metro Manila.
The bank’s expansion program has already been submitted to the Bangko Sentral ng PIlipinas (BSP) whcih has indicated that banks that are opening branches catering to microentrepreneurs and SMEs may receive exemptions from the prevailing branch moratorium.
A large number of the branches will be microfinance-oriented branches in recognition to the important role of microentrepreneurs and the small and medium enterprises (SME), which have been fueling the country’s economy since the Asian crisis in 1997.
It is also designed to put a stop to the loan sharks and uncrupulous lenders, like the notorious five-six, which have been bleeding dry the country’s microentrepreneurs and SMEs.
"We are offering lending rates from 12 percent to 24 percent per annum, and loans a low as P150," Cabangon said.
Assuming that the BSP gives the nod, Citystate Savings is prepared to acquire branches held by the Philippine Deposit Insurance Corp. (PDIC). The PDIC is selling branches as a result of bank closures and liquidation.
Meanwhile, the thrift bank will introduce new banking products as well as enhance existing ones.
Among these are the popular "pawnshop" lending rate of between one to two percent versus the market rate of between seven to 12 percent. There is also the salary loans with a rate of 11 percent per annum versus the prevaling rate of 11.5 to 11.75 percent offered by other bnaks.
The bank president, however, stressed that all its present standard operations will remain in place like accepting deposits and other treasury activities.
"We are expanding services not reducing. We are in fact applying for a government securities dealer (GSED) license with the Securities and Exchange Commission (SEC)," he added.
Citystate Savings is looking at a modest 10 to 30 percent growth in net earnings this year under the three-year program.
The prudent outlook is however protected by its 5.68 percent return on equity (ROE) rate and a capital adequary ratio (CAR) of a whopping 53 percent. The BSP wants all banks to have at least a 10 percent CAR.
It has a negligible three percent non-performing loan (NPL) ratio to total loan portfolio with an asset base of P1.3 billion.
"We want to grow the bank by leaps and bounds with the public interest in mind, and ample protection for the bank’s stakeholders," Cabangon pointed out.