ASIA United Bank (AUB) Corp. commits to further develop its technology and explore segments of the Philippine market as it strives beyond its 20th year to be among the top 10 universal banks in the country under its new president Manuel Gomez.
After two decades that saw economic hauls in Asia from its sunken currencies in October 1997, the central bank’s restrictions to setting up bank branches in 2000 and the widespread distrust in financial institutions following investment anomalies in the United States in 2008, Gomez said AUB will be evaluating again its resources and target markets to benefit from today’s challenges that especially include the Philippines’s digital transformation and large unbanked sector.
“It’s going to be a new journey for us. We have to redefine ourselves and ask if we want to stick with our market or explore other markets. A lot of opportunities present themselves, but you can also create opportunities. We will take one step at a time,” Gomez said during AUB’s 20th anniversary last Thursday at Marriott Hotel in Pasay City.
From its establishment on October 3, 1997, as a commercial bank, AUB expanded into a universal bank in 2013 and acquired countryside lenders Rural Bank of Angeles and Cavite United Rural Bank, as well as leasing and financing firm Asia United Leasing and Finance Corp. in 2014.
Currently, AUB has a loan portfolio consisting of 70-percent corporate loans and 30-percent individual loans.
It also caters to the financing needs of small and medium enterprises and takes care of the pension of veterans of the Armed Forces of the Philippines. Earlier this year, the bank intensified its consumer banking for personal loans and remittance with its mobile-banking services.
As AUB moves forward, the 63-year-old banker, who will replace 69-year-old founding President Abraham Co on January 1, 2018, said the bank considers partnerships with multiple firms in the finance sector, including financial technologies, dubbed fintechs and foreign banks in ensuring adequate capital to serve its current and future clients.
“It depends on the quality of our management and the kind of products that we have to serve that particular market. We can’t really be putting up branches left and right because of high costs, but we are still well within the capital adequate ratio of the Bangko Sentral ng Pilipinas (BSP). But we cannot grow organically when other banks in the top 10 are also growing. We want to be in the top 10,” said Manuel A. Gomez, executive vice president of AUB.
As of June 31, AUB remains 14th among the country’s universal banks with the largest total assets. AUB reported P197 billion in total assets, and P27 billion in equity and 227 branches.
Co said BSP regulations and the emerging needs of the various segments of the market for financial inclusion will continue to shape the development of AUB.
The BSP launched the National Retail Payment System that requires financial institutions to adopt technologies and collaborate with multiple sectors for a cash-lite and digital economy in the country by 2020.
“In 2000 the BSP regulation required us to stop bank branches in so-called overbanked territories or Metro Manila. Ever since we have struggled but we learned a lot, and that forced us to look at alternatives that was technology.
The growth of our economy dictate we have better banks. You are seeing stronger and bigger middle class and for it to be sustainable, it has to be inclusive. However, still there is the unbanked sector. Technology will also replace hard-currency transactions where it is efficient and cost-effective,” he said.
In early-2000s AUB introduced its signature verification system for faster interbank loans, electronic fund transfer for 10-minute remittance service and virtual kiosk for in-branch online transactions.
AUB also promised to update employee training in protecting client funds from various risks while it deepens relationship with clients through its branch network.
“After the 2008 crisis in America, the BSP issued regulations to make the banking environment safer, and that forced banks to be more skilled in evaluating risks. Thus, we find the environment more challenging and we need a strategy,” he said.
“We empower our branch managers because we believe that to be able to increase client relationship, we have to be able to offer what they need. We are like marines; we chase profits and assets for us to build a business and create an image.
In 20 years we have matured and dreamed many things within our capabilities,” Gomez added.
