The Chamber of Thrift Banks (CTB), the umbrella organization of the country’s thrift units, reported the sector showing remarkable stability and growth underpinned by key indicators that highlight its robust performance despite the challenges faced the past year.
“The past year has been marked by a positive trajectory in the thrift banking sector’s performance. Despite external challenges, the industry has managed to not only maintain its stability but also achieve substantial growth across various crucial metrics,” said CTB president Cecilio San Pedro.
As of end-May this year, industry total assets grew to P943 billion, a 5.3 percent increase from only P895 billion a year earlier. This was traced to the focus on deposit mobilization that led to increased resources and overall stability.
Lending activity also showed expansion, with core lending rising 14.6 percent, reaching P616 billion from previous year’s P537 billion. “This growth is significant as it flags the sector’s commitment to serving its designated operational niches, which include SMEs, housing, and consumers,” said San Pedro.
Its non-performing loan ratio remained manageable at 7.19 percent, reflecting the thrift banks’ proactive approach to risk management and asset quality.
The industry’s deposit liabilities exhibited a healthy 4.7 percent year-on-year growth, reaching P713 billion from P681 billion a year ago. Total capital surged 12 percent from P135 billion to P151 billion.
The said growth has led to a robust capital adequacy ratio of 19.17 percent, based on the latest available data as of end-December 2022. This significantly surpassed the minimum required CAR of 10 percent, highlighting the sector’s financial strength and prudence.
This develops amid difficulties brought on by the complexity of the digital transition, including worries about cybersecurity, heightened competition from fintech firms, the need for internet literacy, as well as evolving regulatory requirements.
“Our member-banks are poised for a range of growth opportunities. These prospects include the ongoing digital transformation in banking,” said San Pedro, as he urged them to bolster their digital infrastructure, develop user-friendly mobile apps, and implement innovative solutions.
“Favorable regulatory changes can fuel innovation, while a strong commitment to data security and privacy will bolster customer trust,” he added.
According to San Pedro, member-banks can also focus on supporting small and medium-sized enterprises (SMEs), dive into sustainable finance endeavors, explore international expansion, and champion financial inclusion by designing accessible products for marginalized populations.
“We at the CTB can look forward to a future full of growth opportunities. By embracing these avenues and remaining adaptable to evolving customer needs and market trends, member-banks can position themselves for success in an increasingly dynamic and competitive banking landscape,” he explained.
The CTB will hold its national convention on 22 September this year at the Dusit Thani Hotel. The forum carries the theme “Thrift Banks 2023: Taking the Lead to Economic Recovery through Digitalization” as the Chamber aligns with the BSP’s drive for technological progress and digital transformation in the banking industry.
