China Bank sets aggressive targets for 2014

MANILA, Philippines - China Banking Corp. is pulling all stops for 2014.

The universal bank is looking at a loan portfolio surge of between 18 to 20 percent, and a 20 percent expansion in deposits.

It also plans to surpass the 400-branch network target by early next year, while its thrift bank subsidiary is looking to hit the century mark this year.

China Bank senior vice president and chief operating officer (COO) Ricardo R. Chua said that loan growth would be the principal growth driver for the bank this year, as the year will again reflect weak securities and foreign currency trading.

“But there is still strong demand from both the consumer and commercial market,” Chua said yesterday during the formal launching of a domestic money transfer partnership between Cebuana Lhuillier and China Bank Savings (CBS), a subsidiary of China Bank.

Loans grew by a little over 16 percent in the first quarter of 2014 to P179.5 billion with the retail loans showing the way. These resulted in a 7.5-percent increase in net interest income.

Chua said that the anticipated increase in policy interest rate this year would still benefit China Bank due to its balanced composition of assets and liabilities.

Nearly half of its loan portfolio is positioned with corporates, a little over 30 percent accounted for by the middle market, and 13 percent consumer.

“We would like the consumer loan portfolio to grow fastest this year,” Chua said.

In fact, CBS reportedly entertains retail loan applications worth over P1 billion from its expanding small and medium enterprise (SME) base.

It will be launching its first credit card with MasterCard at the start of the second semester. It will be EMV-compliant for both international as well as Bangko Sentral ng Pilipinas (BSP)

Meanwhile, China Bank is optimistic that it would reach its target 400-branch network by next year. It is already operating 299 branches and looking to open another 65 this year.

That does not include the 73 existing branches of its thrift bank, and the 78 branches it took hold as a result of its acquisition of Planters Development Bank.

CBS president and chief executive officer Alberto Emilio Ramos said that the thrift bank would open a minimum 29 branches this year, or reach a total of 100 branches.

Of the 29 new branches, 11 would be located inside the nationwide network of the Save More convenience groceries.

“Including part of the branches of acquired Planters Bank, China Bank Savings would like to have a branch network of between 145 to 150 by the end of 2015,” Ramos said.

Aggressive expansion has been the name of the game as early as last year, with the Bangko Sentral ng Pilipinas (BSP) approving the applications of five universal and commercial banks for 44 new banking offices in the fourth quarter.

Aside from China Bank, the other banks were: Asia United Bank Corp (AUB) applying for 16 branches; Metropolitan Bank and Trust Co. (Metrobank), 18 branches; BDO Unibank Inc. (BDO), seven; Security Banking Corp. (Security Bank), two; and the Land Bank of the Philippines (LBP), one.

So far, universal and commercial banks opened 108 offices nationwide.

Seven thrift banks, as well as 12 rural lenders, applied for new banking offices. About 12 thrifts and 10 rural banks opened new branches.