Friday, 29 January 2010

BPI posts double-digit growth in remittance transactions in 2009

Erik de la Cruz
Business Mirror

BANK of the Philippine Islands (BPI) had another banner year for its remittance business, posting a double-digit increase in volume of cash transfers it handled in 2009 and winning a Best Remittances Provider in Southeast Asia award from a Hong Kong-based investment magazine.

“We’re running a very successful remittance business. We had another double-digit growth that was better than the industry’s performance last year,” said Teresita Tan, BPI senior vice president and group head of overseas banking and channel services group.

The 2009 remittance figure has already been presented to the BPI’s board and reported to the Bangko Sentral ng Pilipinas (BSP), she said.

The BSP is expected to release the 2009 remittance figures reported by banks around the middle of February, and had projected a growth of at least 4 percent over the previous year’s total volume of $16.4 billion. That figure represents money sent home through banks and does not include those that pass through so-called informal channels.

Remittances coursed through banks between January and November last year totaled $15.8 billion, representing a 5.1-percent increase over the same period in 2008. According to the central bank, the increase was driven by higher inflows from both sea-based and land-based workers.

“We saw fantastic growth in remittances, particularly from seafarers, because they were largely unaffected by the global financial crisis,” Tan told reporters. “But the Middle East was really the main source of remittances that we processed last year.”

Tan declined to reveal the total volume of remittances that BPI handled last year, citing an agreement with the BSP. But she said the bank was also able to maintain its market share at more than 20 percent.

Based on unconfirmed reports, BPI’s market share improved to 27 percent in 2009 from 23 percent the previous year. BPI-handled remittance transactions in 2008 reached more than $3.7 billion.

The bank was recently named the Best Remittances Provider in Southeast Asia for 2009 by Alpha South East Asia magazine, an independent institutional investment magazine published monthly and headquartered in Hong Kong.

The magazine caters to institutional investors and management companies all over the world.

Prior to the regional recognition, BPI—the country’s biggest bank by market capitalization—became the first bank to be elevated to the BSP Hall of Fame last year for winning the Top Commercial Bank for Overseas Filipino Remittances award for three years in a row (2005 to 2007).

Tycoon Henry Sy’s Banco de Oro Unibank (BDO), meanwhile, was recognized as the top commercial bank for remittances for 2008 as its ranking improved from being No. 3 in 2007 as a result of the integration of its remittance business with that of Equitable PCI Bank.

BDO became the country’s largest bank in terms of assets after absorbing Equitable PCI in 2007.

BDO-handled remittance transactions in 2008 accounted for nearly 26 percent of the industry-wide volume of $16.4 billion, or about $4.3 billion.

Metropolitan Bank & Trust Co., the second largest by assets, was in fourth place with a market share of 13.5 percent in 2008. Tycoon Lucio Tan’s Philippine National Bank had a bigger market share of 16 percent.

Given the generally upbeat outlook for the global economy this year, Tan said the remittance business should remain buoyant.

The BSP has projected a 6-percent growth in remittance volume this year, but some foreign and local financial institutions have painted a rosier growth outlook. Economists expect remittances to push domestic demand higher and boost economic growth this year.

“We now see a pickup in remittance volumes from the (crisis-hit) US and Europe,” BPI’s Tan said.

To solidify their relationship with the sources and beneficiaries of remittances, the country’s biggest banks are aggressively wooing Filipinos working abroad and their relatives in the Philippines to open deposit accounts with them or invest their hard-earned money in different instruments.

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