The Gotianun-led East West Banking Corp. (EastWest) is increasing its priority banking areas called “EastWest Priority Centers” across the country, from the current nine to 20, in the next two years as it builds on the rising wealth of high net-worth Filipinos with at least P2.5 million assets under management (AUM), the lowest entry level for this kind of product.
EastWest, the country’s 11th largest lender in terms of asset size, is one of the growing number of universal and commercial banks focusing on providing services that a high net-worth client would need, but among financial institutions with a similar elite segment, this bank is one of the fastest-growing, to rival those of British bank HSBC, the Sy Group’s BDO Unibank Inc. and its private banking unit, among others.
The bank’s CEO Jerry G. Ngo is fairly confident that with a lower AUM requirement of P2.5 million, their EastWest Priority will continue to grow a larger customer base compared to other banks with a P5 million to P10 million minimum opening balance to be considered an elite client.
Ngo said they will offer better and tailor-fit services for clients who want to enjoy personalized financial and wealth management services. This entails a dedicated relationship manager that will design, customize, and help manage an investment portfolio based on their risk appetite and profile, as well as timely market reports that can help them make informed decisions.
“We’re looking towards really revamping our priority banking and expanding that. (It’s a market) that we will come in as the per capita income of the country grows,” he said.
Having a higher income class as a country is significant mainly in socioeconomic development. This would mean that the Philippines’ per capita gross national income or GNI will be in the range of $3,900 to $12,200.
The country’s high net-worth individual sector is growing. In fact, credit rating agency S&P Global estimates that the Philippines’ GDP per capita is about $3,903 in 2023 and $4,273 in 2024. In 2022, based on World Bank data, the country’s GDP per capita was $3,498.
Since before the pandemic hit the globe, EastWest has been looking at the higher end of the market and not just in Metro Manila, but to bring its exclusive services to high-value clients outside of the National Capital Region and to the provinces.
Increasing market share
Right now, the country’s rich and their wealth banking requirement is mostly served by HSBC, BDO, and Bank of the Philippine Islands. Almost all big banks such as Rizal Commercial Banking Corp. and Security Bank Corp. have wealth management and services catering to affluent Filipinos.
Ngo said in terms of market share, he doesn’t have the numbers yet but “it’s been growing.” But EWB has a good base. Some of its high net-worth clients are former clients of British-owned Standard Chartered Bank (Stanchart).
The Gotianun bank, subsidiary of conglomerate Filinvest Development Corp., acquired some of Stanchart business when it bought two of its units in 2016. This started EastWest Priority.
“I think since the time of the acquisition we’ve grown the client base almost three to four times,” said Ngo. “But more importantly, we’re expanding the reach,” he added.
With nine priority centers in operation to date, Ngo said the “target is to (put up) around 19 to 20 in the next two years.”
For now, priority centers are located in these areas: Davao Sta. Ana; Cebu; Ortigas Center; San Fernando-Dolores; The Fort-Beaufort in Bonifacio Global City; Alabang Frabelle; Binondo; Makati Sky Plaza; and Meriton One-Quezon City.
“The more exciting thing is we’re moving out into the provinces. Because as, and when the country reaches this next level of growth, you will need to find pockets of areas,” said Ngo.
To expand their reach, between now and 2025, they will establish priority centers in other areas such as Bacolod, IloIlo, Cagayan de Oro, General Santos in Mindanao, Pampanga and Baguio, among other locations.
“We’ll spread it out,” said Ngo. “We are expanding,” he said confidently. The bank’s EastWest Priority is ready to go head-to-head with competitors in this segment.
He referred to EastWest’s wealth banking as “aspirational” which means it’s not as yet as active as HSBC used to be, or BDO’s private banking. He compares their operation as a smaller version of private banking, but not quite private banking.
“We’re aspirational. That’s our positioning (and) that’s moving quite nicely. On the back of that, we’re also expanding our MSME (micro, small and medium enterprise) coverage on our corporate banking. We also want to deal with the proprietors, the individuals who own the companies, but also their own personal loans. We will link the two,” said Ngo.
As for its consumer lending side, he said – “we’re building technology (to) automate decision making, loan origination system and so on.”
Creating more affluent Filipinos
Ngo said in expanding its wealth banking, they also ensure to establish more of the up-and-coming wealthy and to help them have a better foothold in terms of banking and financial services.
“We’re also making sure that we have a good value proposition to bring to our clients wherever we go,” he said.
EastWest Priority clients are automatically given an EastWest Visa Platinum Debit Card, and will be eligible to apply for premium credit cards with all the perks and privileges such as the EastWest Priority Visa Infinite.
They are entitled to better rates and fees, get access to any priority center and priority lanes at select EastWest stores, as well as the convenience of a 24-hour EastWest Priority customer service hotline.
These clients will also have the benefit of having an in-depth approach to their financial goals as well as market intelligence on money market, fixed-income and investment instruments.
EastWest Priority offers privileges such as dedicated relationship managers, wealth management solutions, and exclusive lifestyle benefits. But more than attracting the wealthy clients, the bank's high-value service significantly increased its portfolio and improved retention of clients.
Ngo said since 2020, even with the pandemic, they have been growing the number of their affluent clients.
At the moment, he admits it is difficult to determine market share since it is also difficult to measure the size of the wealth banking market. It is not as easy as total number of accounts which anyone can get from the Bangko Sentral ng Pilipinas.
Ngo said the way banks segment this market is also “hard to say”. Each bank may have different segmentation methods. “So, it’s not apples to apples comparison,” he added.
Presently, the bank has more than one million depositors plus another million as consumer borrowers. About a third of the one million depositors are already online or have access to the bank’s digital services.
“They deal with us in many different ways,” said Ngo, and most would still require face-to-face banking which only a brick and mortar branch can provide versus a digital bank.
Next best thing
EastWest Priority was recently recognized the “Best Private Bank” by Global Finance, following its earlier win as “Best Priority Banking Experience” at the International Finance Magazine (IFM) awards in July this year.
With Ngo at its helm, EastWest has set its “bar high in the financial industry through its customer-centric solutions.”
When the bank won the IFM awards, Ngo said that “as CEO, it's especially meaningful to me that we are part of an elite group of banks that have been acknowledged for their exemplary customer service.”
EastWest Priority improved the bank’s own returns. Since its launch in 2016, the bank’s priority banking portfolio has grown significantly, or more than double its starting numbers.
With this growing affluence among Filipinos, there is more room among local banks to share in this market. So far, Eastwest is going to be a better option.