March 28, 2017 | MANILA, PHILIPPINES

No new branches for CSB this year

ABOITIZ-LED thrift lender City Savings Bank, Inc. (CSB) is not looking into putting up more branches this year, its chief executive said, as it focuses on solidifying its partnership with PETNET Inc.


City Savings Bank President and Chief Executive Officer Catalino S. Abacan said the bank will concentrate on reinforcing their relationship with PETNET -- the country’s largest agent network of money transfer giant Western Union.

“[Our] concentration is to strengthen the partnership, partnering [now] because in the past two years we expanded so fast from 35 branches and we ended [2016] with 106 branches,” he told BusinessWorld, when asked about CSB’s expansion plans for 2017.

The thrift lending arm of Union Bank of the Philippines (UnionBank) opened six new branches to end the 2016 with 106 branches.

“We are not thinking of brick-and-mortar anymore but we have a partnership with an Aboitiz-owned company as well, the PETNET. We will tap their services especially in the Mindanao area,” Mr. Abacan said.

In 2015, Aboitiz Equity Ventures, Inc. (AEV) acquired a majority stake or 51% shares of PETNET, which is now the conglomerate’s money remittance firm, under a P1-billion deal.

PETNET was poised to boost CSB’s loan portfolio as it sought to widen its reach in the local market through an existing tie-up with the thrift lender on salary loans.

In 2016, PETNET President Lorenzo T. Ocampo had said the lending business is expected to be “a strong second leg” in their operations “within the next two years,” citing its partnership with CSB.

“Of course there are glitches along the way, we have to iron it out... So hopefully, our expectations this 2017 is [the partnership should be] problem-free,” Mr. Abacan said.

The money remittance firm was earlier established to grow the branch network of Western Union in the country. Its branch network is focused on services of Western Union with products such as bills payment and money exchange.

UnionBank took over CSB in 2013, a move that consolidated the Aboitiz’s banking ventures under one company. CSB is also majority-owned by AEV and its food unit, Pilmico Foods.

Earlier this month, Union Bank President and Chief Operating Officer Edwin R. Bautista said the lender’s “all-time high” bottom line in 2016 was on the back of their business model shift from being dependent on trading gains to gearing towards expanding its lending business.

According to Mr. Bautista, their retail loans “grew faster” compared to their corporate loans last year, to which 60% of their total loan book account for their retail lending activities that comprise of small businesses and individuals while 40% are from their corporate lending.

The country’s tenth largest lender saw its bottom line reach P10.1 billion by end-2016, 67.3% higher from the P6.0 billion profit earned in 2015, mainly due to the expansion of its total loan portfolio for the year.

While its total loans stood at P235.4 billion in 2016, 31% higher from the P179.55 billion raked in 2015 on the back of an increase in their recurring revenues primarily driven by its consumer loans and deposits.