AUB to bank on marketing and IT for CASA growth

Published December 23, 2020, 5:00 AM

by James A. Loyola

Asia United Bank Corporation (AUB) is seen to continue growing its current accounts and savings accounts’ share in deposits through aggressive market marketing and focus on information technology.

The expected improvement in its funding source is among the reasons why the bank has been assigned a high issuer credit rating of PRS Aa plus (corp.) by Philippine Rating Services Corporation (PhilRatings). The rating has a Stable Outlook.

A company rated “PRS Aa” differs from the highest rated corporates only to a small degree, and has a strong capacity to meet its financial commitments relative to that of other Philippine corporates.

PhilRatings said the issuer rating takes into account AUB’s very good funding profile; more than satisfactory capitalization; and highly-experienced management and clearly-defined strategy, which are seen to provide sound guidance to the bank amidst challenges due to the pandemic. 

AUB’s funding profile as of end-2019 was more than satisfactory with deposits accounting for 90.3 percent of total liabilities.

The share of current and savings accounts (CASA), which are considered less expensive and more stable funding sources, to total deposits was at 82.3 percent, as of end-2019, an improvement from the 75.0 percent recorded as of end-2018.

In particular, CASA rose by 19.4 percent, from P144.8 billion in 2018 to P172.9 billion in 2019, as a result of the bank’s intensified marketing efforts to increase its deposit base, as well as the expansion of the branch network to 267 branches in 2019, from 262 branches in 2018. 

AUB expects to keep its funding momentum by growing its core deposits. The Group will concentrate its operations on aggressively increasing CASA deposits, through marketing of the bank’s cash management solutions, deposit growth of existing high value clients, new products, and renewed efforts on new customer acquisition.

“Forecast shows that CASA’s share to total deposits will consistently grow, moving forward,” said PhilRatings.

The bank will focus on Information Technology (IT) platforms to increase its market presence. AUB’s introduction of new products and services in the coming years is seen to improve its competitive strength, while enhancing the customers’ banking experience.

Going forward, AUB will focus on maximizing returns from existing branches. AUB will continue to rely heavily on IT, as the bank continues to develop cost-efficient solutions in response to customer demands.