BSP hails thrift banking sector

MANILA, Philippines - The country’s thrift banking industry has registered historic levels in 2010, according to the Bangko Sentral ng Pilipinas (BSP).

“Both deposits and loans of the thrift banking industry are at historic high levels . . . . while capital is at an all-time high,” BSP Governor Amando M. Tetangco said in a speech at the annual convention of the Chamber of Thrift Banks (CTB) yesterday.

Tetangco said that the total assets of the thrift banking industry expanded by 75 percent to a record P606 billion dating back from 2005. Capital expanded by a whopping 47 percent to an all-time high of P66.8 billion in December 2010.

From 2005 to 2010, consolidated deposits grew by 88 percent to P491 billion, and net loans increased by 87 percent to P345 billion.

The historical central bank governor declared that the thrift banks has and will keep the Philippine economy on the growth track.

“I say this on the basis of its track record,” Tetangco, the first re-appointed central bank governor of the Philippines, said.

But he challenged the industry to enforce reforms despite the historic performances.

After all, majority of the country’s banks recorded huge profits, some of which were also record levels. The commercial banking system, in fact, also aggressively tapped the capital markets to increase its base in anticipation for the demands of Basel II and III.

Thrift banks basically cater to the consumer or retail sector, the small and medium enterprises, and the middle market. The sector is made up of savings banks, development banks, and savings and loan associations.

The recent fiasco of the Banco Filipino Savings Bank and the closure of over a dozen rural banks had left a bad taste on the mouths of the banking public.

“From a developmental perspective, we can streamline processes to become more efficient, invest more to strengthen the core competencies of our bankers, and strengthen guidelines that protect the public from potential abuse and malfeasance,” the BSP Governor said. “The market landscape continues to shift and change. And at all times, good governance will be the key to long-term sustainable growth.”

Banco Filipino is a thrift bank, which was closed by the Monetary Board of the BSP last week.

Most thrift bankers attending the CTB convention said that the Banco Filipino fiasco had no impact on their sector.

“It is a non-issue,” one banker, representing one of the biggest thrift bank, said. He continued to point out that the closed bank was ranked among the weakest in the sector.

Another banker said that it should serve as a warning to other negligent banks to shape up. “But it should be a reminder to the regulators that they better not be complacent.”