PNB Savings bares expansion plan

MANILA, Philippines - PNB Savings Bank (PNB Savings) targets to open more branches nationwide as part of its plan to expand in the next three to four years.

The thrift bank of the Philippine National Bank (PNB) expects to open 100 full-service branches by 2018 and be counted among the top five thrift banks.

“We are open to acquisitions. We will not stick to a brick-and-mortar strategy,” Jovencio B. Hernandez, president and chief executive officer of PNB Savings, said.

PNB is openly bidding for the United Coconut Planters Bank. Hernandez is looking at UCPB Savings Bank in the event of a successful acquisition.

He is also receiving offers from a number of rural banks, some of which are located in areas of interest.

The expansion plan requires locating first in Southern Luzon and linking this with the southern part of Greater Metro Manila, Hernandez said.

“Significant acquisitions with rural banks with 10 or more branches will speed up our nationwide footprint before 2018,” Hernandez said.

However, expansion need not depend solely on bricks-and-mortar, as PNB Savings will rely on technology, partnerships and strategic alliances to speed up the process well beyond targets.

Hernandez said they would be combining physical and virtual branches. “That’s the game plan.”

PNB Savings will adapt existing technologies for online and mobile banking to increase both reach and number of depositors. It will likewise tap the retail customers of PNB for virtual banking.

The thrift bank has a depositor base of 4.5 million.

PNB is one of the leaders in the overseas Filipino remittance business among banks, and these are the potential depositors and borrowers of the thrift bank. The commercial bank’s 4,000 or more corporate relationships can generate billions of pesos in personal loans, for example, offered by PNB Savings.

PNB Savings has a loan portfolio of over P18 billion and it is expected to hit the P20-billion mark by the end of the year.

Seventy-five percent of the loan portfolio is mortgage loans, another 22 percent in auto loans, and the rest are SME, development lending, personal and salary loans.

“That is the beauty when you have a customer base coming from the Tan group of companies and its corporate partners,” Hernandez said.

Meanwhile, it will tap alliances with major pawnshops to increase its distribution network, especially the unbanked or under-banked segment of society. Again, technology will play a major role in extending credit or accepting deposits.

“We are going to change the landscape of deposit taking and lending,” Hernandez said.