THE THRIFT banking industry saw its assets and loans grow despite challenges brought by increasing digitalization in the financial sector.
“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,” Chamber of Thrift Banks (CTB) President Cecilio D. San Pedro said in a statement on Wednesday.
The sector’s assets grew by 5.3% to P943 billion at end-May from P895 billion in the same period last year.
This was attributed to deposit mobilization, which led to increased resources and overall stability, CTB said.
“Lending activity has also shown expansion, with core lending figures rising by 14.6%, reaching P616 billion from the previous year’s P537 billion,” CTB added.
“This growth is significant as it [shows] the sector’s commitment to serving its designated operational niches, which include SMEs (small and medium enterprises), housing, and consumers,” Mr. San Pedro said.
The sector’s non-performing loan ratio stood at 7.19% at end-May.
Meanwhile, deposit liabilities grew by 4.7% to P713 billion from P681 billion in the same period.
Total capital also surged by 12% to P151 billion from P135 billion.
As of end-2022, the industry’s capital adequacy ratio stood at 19.17%, above the minimum 10% requirement set by the Bangko Sentral ng Pilipinas.
Thrift banks posted growth despite challenges brought by the growing digitalization of the financial sector, CTB said. These challenges include cybersecurity risks, rising competition from financial technology firms, and evolving regulations, it added.
“Our member banks are poised for a range of growth opportunities. These prospects include the ongoing digital transformation in banking,” Mr. San Pedro said.
“Favorable regulatory changes can fuel innovation, while a strong commitment to data security and privacy will bolster customer trust,” he added.
He said member banks should focus on supporting SMEs, exploring sustainable finance and expansion, and boosting 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 said. — AMCS