The Sterling Bank of Asia (Sterling Bank) is reportedly in talks with several small-sized commercial banks in a bid to increase its influence in preparation for seeking a commercial bank license.
Sterling Bank, the thrift bank company of the JTKC Group of Companies, Surewell Equities, and Star Equities.
Bank officials confided that they are more interested in banks that are strong in products and services where Sterling Bank is wanting. Among these is a strong consumer banking business, including a robust credit card business.
“It helps if the prospective bank has all the basic infrastructure of a full commercial bank,” they added.
Just entering its third year in operation, Sterling Bank has a capital of over P1 billion and assets worth P10 billion.
Sterling Bank president Lamberto R. Villena however refused to name the small commercial banks admitting to have agreed on a confidentiality agreement.
The bank’s major stakeholders have given Villena the green light to undertake exploratory talks with prospective acquisitions. “We can raise the funds when we need it as there are more opportunities today,” he assured.
In fact, the bank’s officials have already sounded of the Bangko Sentral ng Pilipinas (BSP) of their interest for a commercial banking license. The monetary authority requires a minimum P2.4 billion capital for aspiring commercial banks.
Meanwhile, banks with insufficient or minimal capital will find it hard to compete with healthy banks in the face of the global credit crisis. The Philippines and the rest of Asia is starting to feel the full force of the crisis.
The global banking sector is reportedly weighted down by losses and write-downs amounting to $3.6 trillion. And while the Philippine banking system is relatively healthy, it remains vulnerable to the impact of a weakening economy.
Villena however views the present crisis as offering more opportunities.
“The playing field has been leveled by the crisis,” he said. Unconfirmed reports indicate a migration of accounts from foreign banks, and another wave of depositors moving to bigger domestic banks from the smaller players in the industry.
By the end of 2008, Sterling Bank’s total deposits grew to over P10 billion while loan portfolio expanded to over P6 billion. Capital adequacy ratio (CAR) stood at a strong 15 percent.
Its loan portfolio has improved in favor of the consumer market. From an 80:20 ratio in favor of corporate lending, it presently stands at an even 50:50.
“We want the consumer side to increase to 60 percent by the end of the year,” the bank president said.
Next month, the bank will open its 20th full branch with the same number of automated teller machines (ATMs). It is looking to open 10 more within the year.
Late last year, it launched a debit card with Visa International. Its primary target are the overseas Filipinos and their beneficiaries in the Philippines. In fact, it has allied with iRemit Global Remittance, the country’s strongest non-bank institution in the remittance business.
By the end of the year, it has a card base of 60,000. And officials said that the potential could hit the millions, equivalent to the client base of iRemit.
JTKC Group of Companies and Star Equities are involved in a wide range of industries, ranging from logistics to finance, real estate, manufacturing, hotel and resort properties. Among them are the Discovery Suites in Ortigas Center, the Mansions Group of service apartments, Kent Vinyl Tiles, and iRemit Global Remittance. – Ted Torres