A corporate strategy on Equitable PCI Bank

• Main Author: Perez, Alexis N.
• Format: text
• Language: English
• Published: Animo Repository 2000
• Subjects: Banks and banking > Philippines; Business Administration, Management, and Operations
• Online Access: https://animorepository.dlsu.edu.ph/etd_masteral/2747
• Institution: De La Salle University

On its second year as a merged bank, Equitable PCI Bank is emerging as a major force in the Philippinr banking industry, strongly committed as ever in the service of its depositors. The bank is reinforcing its strong, remarkable presence as one of today's largest domestic banks, successfully surmounting the challenges of a difficult economic and political environment. The bank's aggresive deposit recovery program is mereley onje step towards the realization of its goals. The bank is now fully on track in its overall program under the new management team led by Chairman Antonio Go and President and CEO Deogracias Vistan. The strong and competent senior management team that includes the country's best banking professionals, combines entrepreneurship, the highest levels of professionalism and diverse banking expertise. With the substantial completion of the merger process, the bank's present strategy is focused on utilizing and assimilating the strengths of the former Equitable PCI Bank. Equitable Bank represents leadership in the rapidly epanding credit card business and in the potent middle market while PCIBank stands for leadership in corporate, retail, overseas, remittance, investment banking and leasing markets. Currently, the marged bank is continuously expanding its market presence, increasing intermediation activities, braaodening product offerings, improving the operating and service delivery systems and strengthening the organizations. The current strategy issues confronting the bank include: (1) integrating the cultures of the former Equitable PCI Bank, restoring the bank's tarnished image and consequelntly recovering the remaining deposits lost resulting from last year's political crisis, and maintaining profitability and liquidity. In order to address these issues, the bank will have to utilize effectively and efficently its inherent strengths and maximize opportunities to overcome weakness and threats. The banks inherent strengths have enabled it to overcome the crisis late last year and early this year. As of June 2001, the bank is 4th in total assets (Php242.83 billion), 5th in liquid assets (Php57.15 billion, 3rd in total loans (Php105.46 biliion), 5th in total deposits (Php132.84 billion), and 3rd in capital (Php44.59 billion). The bank likewise maintained its leadersip positon in various key financial businesses. Moreover, the bank is the third largest in terms of distributionnetwork, servicing a client base of some 1.6 million depositors. However, the bank needs to improve on its weaknesses, which include the tarnished image, a meager net income for 2000 of only Php6387.18 million, and high levels non-performing loans amounting to Php24.63 biliion or a NPL ratio of 19.55%, which is 12th among domestic banks and ROPOA of Php9.8 billion or ROPOA/Total loans of 9.25% as of June 2011. Opportunities that the bank can maximize are advances in technology, emergence of information technology, entreance of foreign players, and increased remittances of overseas contract workers (OCWs). Conversely, the threats include the following: (1) unstable peso and stock market, bigger capital requirement for the acquisition of advanced technology and security problems in internet banking. The banks present vision is To be a dominant domestic player in all major busimess lines and be a world-class regional financial services provider . However, this paper proposes that the vision of the bank be To take a proactive, prudent and developmental approach in providing world class banking and financial services, thereby helping the Philippine economy. To accomplish the proposede vision for the bank, this paper has outlined the following general strategies: (1) Continuously form strategic alliances with foreign or local partners to further improve its position not only in the local but also in the regional banking industry (2) to increase its exposure in microfinancing activities especially in the countryside (3) focus on proactive, prudent loan portfolio management as well as work on improving its credit processesand controls (4) pursue effectiveness expense management to ensure greater cost efficiency (5) ways to optimize the use of the new automation systems will be explored and incorporated into the banks strategies (6) enhance himan resources pool for both management and rank and file employees (7) increase deposit generation efforts to improve its financial base (8) adopt a strategic brnach expansion program (8)work on enhancing the efficiency and broad spectrum of financial services that the bank offers to its clients to gain market share (9) develop and implement attractive dividend policy so as to preserve the market pricwe of shares and (10) buyout the GSIS and SSS shares to eliminate government presence.