By LEE C. CHIPONGIAN
The Bangko Sentral ng Pilipinas (BSP) has approved five applications to open regular bank branches and 23 branch-lite units (BLUs) in the first quarter, based on BSP data.
The approved regular branches were lower compared to the first quarter 2023 of three and also significantly down from 75 BLUs approved same period last year.
The BSP has been favoring more of the streamlined BLUs with limited banking services amid the industry’s changing landscape. In total, there were five regular bank branches and 15 BLUs that applied for BSP approval in the first quarter.
Based on a BSP memo, the big banks did not apply to open regular branches in the first quarter but two universal and commercial banks namely Bank of the Philippine Islands and Maybank of the Philippines applied for five BLUs in Cauayan City, Dipolog City, Tagum City and Tuguegarao City.
Only one thrift bank 1st Valley Bank in Lanao Del Sur applied to open one BLU while four rural and cooperative banks requested to open five regular bank branches and 17 BLUs in the first quarter. These smaller banks are: Cebuana Lhuillier Rural Bank Inc.; LifeBank; Mount Carmel Rural Bank; and Rural Bank of Bansud Mindoro.
As for newly-opened branches during the period, the BSP reported that only one regular bank branch and three BLUs were opened by three big banks such as BDO Unbank Inc., Maybank and Security Bank Corp.
In total, there are eight regular branches that opened their doors for the first time in the first quarter this year, 27 BLUs and one Islamic bank. The Islamic bank was opened by CARD Bank A Microfinance-Oriented Rural Bank in Cotabato City.
Of the eight regular bank branches, one was from a big bank, three from thrift banks and four from the rural and cooperative banks. Most of the 27 BLUs were branches opened by rural and cooperative banks.
Regular branches are full-sized banks, mostly traditional brick-and-mortar branches or contained within a building and offers full banking services.
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.
As of end-June this year, the BSP is supervising 44 big banks, 42 thrift banks, 364 rural banks and 22 cooperative banks.
Presently, there are 12,886 bank branches in the country, of which 7,123 are operated by the big banks; 2,567 by thrift banks; and 3,196 by rural and cooperative banks.
Since the pandemic and the rise of digital banking including e-wallet and other online-only financial transactions, the banking industry has reorganized, streamlined and consolidated their traditional brick-and-mortar branches, and opted to digitalized more of its products and services.
Based on central bank's Banking Sector Outlook Survey (BSOS), the digitalization of banking products and services continued to be identified as a top strategic priority by all banks.
In terms of area of focus, banks identified deposit operations as the most important area of technology application followed by payment systems. Mostly it is the big banks that are more advanced in their digital transformation process.