The Bangko Sentral ng Pilipinas (BSP) approved four new banking offices in the last quarter of 2020 compared to 67 new branch applications in the same period in pre-pandemic 2019.
Based on a BSP circular letter, there was only one approved regular branch and three branch-lite units (BLUs) in the fourth quarter 2020, and these are all Security Bank Corp. branches. In 2019, there were 23 regular branch applications and 44 BLU applications by four big banks, and nine are BDO Unibank Inc. regular branches.
The BSP also noted that by the last three months of 2020, 24 regular branches were opened amid the less severe general quarantine community lockdown, and 54 BLUs were also opened. Rural/cooperative banks likewise opened three microfinance-oriented branches. These numbers are lower compared to 2019’s 71 regular branches, 152 BLUs and six microfinance-oriented branches.
Big banks only opened 12 regular branches in the fourth quarter 2020 compared to 44 in the previous year. Thrift banks opened eight regular branches and 10 BLUs compared to 11 and 78, respectively, in 2019. The smaller banks opened 24 regular branches and 54 BLUs versus 71 and 152 in 2019.
The BSP is listing all non-regular bank branches as BLUs since 2018. This means that banks’ extension offices, microbanking offices and other banking offices are now referred to as BLUs. The BSP also allows conversion of regular branches into BLUs.
The difference between regular branches and BLUs is that the latter have limited banking activities but could provide a wide range of products and services suited for servicing the needs of the market except for sophisticated clients with aggressive risk tolerance; while the former (regular branches) are full-sized banks, mostly traditional brick and mortar branches or contained within a building and offers full banking services.
With the COVID-19 public health scare, banks had to close down a lot of their branches while maintaining a skeletal or a minimum number of employees in select branches in compliance with social distancing health protocols. The BSP has no data on how many bank branches are currently in operation while still on lockdown.
Since banking operations were affected by the pandemic, at the end of 2020, bank profits declined by 32.8 percent year-on-year to P155 billion, mainly because of increased loan loss provisioning.
The BSP in a report said the banking system landscape were streamlined last year due to an ongoing industry consolidation.
As of end-December 2020, banking units increased to 13,044 from 12,870 because of new other offices added to the overall network, said the BSP. There were 535 head offices and 12,509 branches compared to end-December 2019’s 547 head offices and 12,323 branches.
At the close of 2020, there were 46 big banks or the universal/commercial banks with 6,983 branches, it’s the same number end-2019 but branches were lower at 6,896.
The number of thrift banks were reduced to 48 from 50 with end-2020 of 2,637 branches compared to 2,633 in 2019. There were 441 rural/cooperative banks with 2,889 branches by end-2020 versus 451 with 2,821 branches in 2019.