METRO BANK BRANCHING OUT TO Consolidate BANKING'S BEST
Branch effectiveness and sales transformation is how
the nation's largest
bank is adding a new perspective to the booming sector
Since the banking sector of any country is dependent on the overall economy, the dramatic turnaround of the Philippine economy has lead to a boom among the nation's banks. Consolidation and new regulations since the Asian Financial Crisis some ten years ago have strengthened the Philippines' financial services and increased access for foreign banks.
The Metropolitan Bank and Trust Co., Metrobank, is the country's largest bank a position it has held for the past 11 years. According to its president Arthur Ty, the Philippine banking industry in general has made a lot of progress, but there is still work to be done, especially in terms of consolidation.
"The last count of banks was 41. We still have quite a number of banks, and although the lion's share is divided among the top ten banks, there are still a lot of the smaller banks around, including thrift banks, rural banks, and development banks," says Mr. Ty. "Consolidation is going to be driven by the nature and extent of the regulations. We have got Basel II coming up, which is the international standard for measuring the adequacy of a bank's capital. I do not know how the smaller banks are going to be affected by that."
With consolidated resources of some $12 billion, the Metrobank group has a combined network of more than 800 local and international branches, remittance offices and subsidiaries worldwide. It has 557 domestic branches and 32 international offices, spanning New York, Hong Kong, Tokyo, Osaka, Seoul, Pusan, Guam, Taipei, , Kaohsiung, Madrid, Barcelona, Vienna, Rome, Bologna, Milan, Singapore, Chicago, Hawaii, and Shanghai.
The General Banking Law of 2000 sparked a surge in foreign ownership of banks in the Philippines. For the past few years, their focus has been mostly on multinationals and consumer credit, especially credit cards, but now they are increasingly buying up local banks and building branch networks. Despite the added competition, Metrobank has continued to outscore the big names in banking.
Mr. Ty is clear on why his bank has been so successful in the Philippines and in the countries where it operates. "The first thing that comes to mind is the culture. Our culture is known to be quite unique. As a company, we are focused on discipline, results, and putting in as much effort into satisfying the clients. Also, proactive management has helped us assess the competitors' strengths, and base our strategies on how we can make our services better. For instance, capitalization. We have anticipated the incoming capital requirements well, whether it be for building the back structure of the bank branches. We actively built infrastructure in the past, and were able to plan around Basel I and II."
One of Metrobank's priorities is to enhance the efficiency of the services on offer, which starts with the branches. Thus, Mr. Ty launched a broad-based program he named BEST: Branch Effectiveness and Sales Transformation.
"At the end of the day, having such an extensive network means the bulk of our business will always be from our branches. We thought that it was time to take on a new perspective and put more focus on what we can provide through our branches," Mr. Ty explains. "At some point, when you have that kind of volume, you have to see whether you are actually building up the business as well as serving customers."
"BEST is really geared around our branches putting more attention into what they do: they do their transaction processing on the one hand, but they also sell to particular segments on the other. It is not something new. A lot of banks, particularly in the more advanced economies, have followed this model. I would go so far as to say, that for international customers, that is the kind of bank branch that they are used to when they go to banks in their own countries. But for us, it is not something that is comfortably entrenched right now. So we have to move in that direction," he concludes.