Gotianun-owned EastWest Bank (EWB) is expanding its consumer-centric business to ensure it will stay on top as the country’s main bank in the consumer market by investing more in data and technology, forging strategic partnerships, mergers, and later engaging in capital raising.
In a press briefing on Monday, April 24, newly-minted EWB CEO Jerry Ngo said the bank is investing heavily and looking at new capabilities in technology and data to enhance productivity and to address the evolving demands of bank clients. Without mentioning any numbers, he said it is crucial for the bank to continue to invest and increase profits to improve and update IT, digitalization and cybersecurity.
These are important in growing its consumer lending and maintaining a lead in the mortgage and auto loans segment.
“We’re doubling down on our capabilities on mortgages and that’s something we are working very hard to really have some level of momentum,” Ngo told reporters after the bank’s annual stockholders meeting.
“We’re very, very optimistic for this year although it’s not without its challenges (which are) the interest rate environment (that are) affecting all banks in the country. Secondly, the fact that we’re also heavily investing in technology and that’s going to mean it will have to be born by larger income base in order to support that kind of continuous investment going forward,” he added.
Ngo said EWB will endeavor to keep its lead spot in the consumer lending sector, particularly on the consumer segment. He said the country’s demographic sweet spot where the median age is 26 years old and the per capita income is more than $3,000 per person, will fuel consumption and increase banks’ capital base to provide more funding for economic activities.
“We will make sure we are very focused and disciplined in our risk-taking. We grow at a pace that allows us to handle those risks,” said Ngo.
The new EWB chief, who replaced veteran and banking leader Antonio C. Moncupa Jr. who has retired from the bank after 16 years, said spending on technology is “front and center” in their growth plans.
“This whole evolution with regards to changing demands and how we should respond to that is on everyone’s mind. We will be doing this in keeping pace with our growth trajectory and with what we’re doing as a bank. We will do this at the right pace and at the right areas, focusing on our value proposition more than anything else (which is) to focus on being the leading consumer-centric bank and how we will do that is to be really relevant to our customer segments,” said Ngo.
“More and more it really comes down to technology and data in order to be able to participate in those ecosystems. Making sure our decision process is timely, faster, and its more comprehensive,” he added.
Ngo said said they will concentrate on their core businesses but there are adjacency they could streamline and merge, as well as other joint ventures.
“We’re looking into expanding that (joint ventures). That’s something that the bank does fairly well. We’ve had many successful instances where we partnered (with other companies). We will continue to explore this (as) part and parcel of the overall growth plans for the year,” he also said.
At the moment, EWB operates 468 branches, both unibank and rural bank. “We’ll be focusing more on our digital presence,” said Ngo.
This was a strategy that works for them. In terms of income outlook, Ngo said the bank is back to prepandemic levels. “We’re doing that quite nicely, quarter-on-quarter, it’s good. The momentum will hopefully stay robust. Our strong points as a bank – we’re about to hit a demographic sweet spot and I think a lot of us are aware of that. This happens just once in a lifetime,” he said. He noted a lot of participation in the labor force, adding to consumption and creating demand which will then enlarge the economy.
“We’re one of the most unique banks in the country. We’re the most consumer-centric bank. Our portfolio is more than 70 percent on the consumer side and only less than 30 percent in the corporate. Most banks in the country (are opposite). A lot is 70-80 percent on the corporate portfolio. A lot are trying to go into the consumer side of the business. (We’ve seen this in other countries) that whole shift will happen where the portfolio will move towards consumer and less corporate. We’re well-positioned to participate and take advantage of this shift that you will see. (We’re) already there,” said Ngo.
EWB reported a P4.6 billion net income in 2022 and was able to release some P925 million cash dividends. Excluding one-off items, the bank posted a 42 percent increase in net income last year.
The bank also had major changes in the leadership and board of directors, with Ngo taking the helm after Moncupa’s retirement. Jacqueline S. Fernandez is the bank’s president.
Moncupa was vice chairman, and former CEO and president of EWB for more than a decade. He’s now an incoming director at the Gotianun’s Filinvest Development Corp.