PNB plans to spend P1.8 billion on tech upgrades, purchases

The Philippine National Bank (PNB) looks to spend more than half of its allotted capital expenditures this year to upgrade and acquire new technology for delivering banking services, as it endeavors to attract millennials to come and bank with them.

At a briefing on Tuesday following the lender’s annual stockholders’ meeting, PNB said some P1.8 billion will be spent on new technology upgrades and purchases.

The goal, according to the bank officials, is to get the millennial generation to bank with PNB.

The new technology should also help bring down the bank’s operating cost of delivering the various services.

PNB officials also bared a new mobile-banking system designed to pull in the young market segment and will be launched next month.

Bank officials did not disclose more details, but said they are to partner with retailers to increase their banking footprint, especially in the so-called under banked areas of the country.

At present, PNB has a customer reach of 662 branches nationwide. For 2016, they look to add 10 more branches and another 10 for its thrift unit, PNB Savings Bank.

The bank also reported sustained profitability in 2015, when its net income grew by 15 percent to P6.32 billion from P5.49 billion in 2014.

“Strong gains were achieved in the bank’s core business as it continues to show robust loan growth and record income performance,” PNB President Reynaldo Maclang said.

For this year PNB believes its positive growth story can be sustained given the economic developments in and out of the country.

The lender targets profit growth in the “mid-teens” this year.

Some of the banking challenges PNB officials said require positive action include increasing liquidity to a level required by regulators.

Only recently, Bangko Sentral ng Pilipinas  Deputy Governor for the Supervision and Examination Sector Nestor A. Espenilla Jr. cited the need to pursue in full the implementation of the net stable funding ratio (NSFR) liquidity regulation by year’s end, months after the approval of the liquidity coverage ratio (LCR) framework.

The LCR, which was approved for implementation in March, and the NSFR are components of the new liquidity standards under the Basel 3 reform agenda.

Both frameworks require local banks to ensure they have sufficient liquidity to service operational requirements given a fixed period of stress.

The LCR in this case is for 30 days, while the NSFR is over a year.

PNB officials said they have a “very strong liquidity” position adequately covering the requirements of the central bank.


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I HAVE always enjoyed reading Dean West’s blogs, which are insightful and laced with a bit of humor. Dean is founder and president of Association Laboratory Inc., a US firm that provides quality information and strategic insights to association leaders.