LOCAL banks continued to expand their physical network in the first quarter of 2019 despite the increasing prominence of digital banking in the industry.
Latest data from the Bangko Sentral ng Pilipinas (BSP) showed that local lenders put up a total of 471 branches in a year’s time, bringing the total bank branches in the country to 12,417 from the 11,936 branches seen in the same quarter last year.
The increase in bank branches was seen across all bank categories, with universal and commercial banks posting the largest number of new branches during the period.
Universal and commercial bank branches grew from 6,527 in end-March 2018 to 6,659 in the same period this year.
Thrift banks, meanwhile, grew from a network of 2,453 to 2,666 in end-March 2019.
Rural banks grew from 2,956 to 3,092 branches during the period.
Banks have recently started investing heavily in their digital platform, with some banks moving as far as digitizing most of their transactions that are usually catered by a traditional branch.
The most recent case is Malaysian banking giant CIMB, which formally launched its presence in the Philippines via a single all-digital and mobile-first bank.
“Consumers of today and tomorrow need innovative financial solutions that are relevant to their needs, as well as help them get ahead and advance their financial well-being, but they don’t necessarily need a physical bank,” CIMB Philippines CEO Vijay Manoharan said.
Contrary to this, however, local banks are still expanding physically—particularly in the countryside.
In the fourth quarter of 2018, data from the BSP showed that 68 bank branch opening applications were given the necessary approval to set up shop.
In particular, four of these were universal and commercial banks while 41 were thrift banks and 23 were rural banks. Most of these were so-called branch-lite units.
The BSP defines a branch-lite unit as an office or place of business of a bank that performs limited or simpler banking activities.
Since these units are limited in the services they are offering, they are also subject to proportionate regulatory framework, which means less strict rules and more flexibility to execute financial strategies and innovations.