POSTBANK: Exploring Its Growth Potential

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Published:  PHILIPPINE PANORAMA - Sunday Magazine of Manila Bulletin
May 31, 2015

As a financial institution that has already been around for over a century, it was indeed a challenge for the Philippine Postal Savings Bank—now rebranded as Postbank—not only to improve its historically average performance record, but also to cope with the dynamic changes in the banking industry and in the Philippine economic environment.

“When we came in, the bank was losing money, and faced unfavorable findings from the BSP (Bangko Sentral ng Pilipinas).  It was also saddled by a lot of problematic loans, said Postbank President and CEO Cesar N. Sarino.

Under the new management installed by President Aquino, however, not only did Postbank get back on its feet, it was also able to shore up its financial base through record income growth and improved its governance and management.

Postbank Senior Vice President Higinio Fabian added that the face of the bank is now completely different, and is now exceeding its financial targets.

“We succeeded in achieving a complete turnaround of the bank, effecting improvements in many critical facets of bank operation.  Consequently, instead of a loss, we made a modest profit during our initial year (2011), increased it six-fold in 2012, doubled this in 2013, and doubled it again in 2014,” he said.

According to Fabian, Postbank’s latest annual report 2014 showed a net profit of P123.13 million, or double that of the P64.42 million achieved during the previous year.

In terms of total assets, this increased to P9.15 billion as of end of 2014, from P7.21 billion in 2013.  Fabian also showed that the bank’s loan portfolio performance increased from P4.41 billion in 2013 to P5.72 billion in 2014.

In regard to deposits, Postbank registered a total of P7.95 billion, higher than that of 2013 which stood at P6.38 billion.


Postbank president Sarino remarked that the best position to be in business is to be where there is no competition.  This condition prevails in the unbanked and underserved rural areas.  “You are the monopoly in these areas and you therefore have control.  I think that, so far, so good.  We are here to serve those who have no access to credit,” he said.

Sarino added that the bank also aims to attack poverty and unemployment, justifying that poverty is highest in the rural areas, almost 70 per cent.  He also aims to help the agriculture sector, stating that it is often this sector that suffers the most when development priorities are established.

“In a limited way, we have direct impact and that gives us satisfaction.  I think that it is the right way to do it.  It takes patience but you get the satisfaction that you can do something even with limited resources.”  Out of 25 branches, 24 of them are in the provinces—four of them in the unbanked areas.  These include Manolo Fortich in Bukidnon, Himamaylan Island in Negros Occidental, Asingan in Pangasinan, and Tigaon in Camarines Sur.


According to Sarino, following the bank’s turnaround, he would like to position it as a major player in the savings bank industry to be able to contribute to the government’s inclusive financial growth program.  He added that he wanted to increase the bank’s capital base to provide more services.  “I shall go raise some money, asking the private sector local and foreign to invest here.  There are so many things to do, and we can do these faster if we generate more funds to finance all our dreams,” he said.

He says that expansion for greater access is the key, and he intends to set up more branches, more ATMs, cash and debit cards.

Asked if he finds it a threat that other banks might get attracted to the unbanked areas if his countryside focus takes root, he answered, “That means we are succeeding in our trailblazing effort.  It is just fine with me.  The more challenges you get, the stronger you can become.”


Recognizing that there are competitors and setbacks yet to be encountered, Sarino expressed confidence in the bank.  He considers his staff as the Bank’s edge.  “The people here know exactly where we are going.  They have the passion.  We have imbibed it here.”

He also talked about the unique character of the bank, saying that “this is the only government savings bank in the country.”  It has the simplicity and flexibility to venture into new concepts and ideas with other banks hesitate to pursue.

“I am more than satisfied with our financial performance,” Fabian stressed.  “From the time that Sarino came in, we have been able to rescue the Bank from the brink, so to speak, and get back on track in the pursuit of programs called for by its goal of countryside development.

The Bank’s vision, according to Fabian, is to become a strong government bank focusing on rural development by 2020.  He added that the Bank will tap its banking network in synergy with the Philippine Postal Corporation (PhilPost) and its post offices all over the country to widen the financial access of the rural population.

“Basically, our target in our own modest way is to help improve the lives of our people in our rural communities.  The bank has a mandate to help provide financial services in the countryside and in the process spur community development through LGU infrastructure project financing and uplifting people through livelihood and other income generating activities.”

Sarino also wants Postbak to stand out as the countryside bank.  “I would like to give impact directly to the people who need our assistance the most,” he said.

Postbank recently established micro banking offices in six unbanked and underserved municipalities which shall extend micro loans to small businesses and livelihood ventures.  If successful, the bank plans to replicate these all over the country using post offices as location venues.

Fabian added that the Bank is also strengthening its core banking product line partly to raise more capital for its new livelihood and entrepreneurial programs in the countryside.

“For you to be able to service the unbanked areas, you also need to operate in the banked areas.  Countryside banking can be costly.  You need some subsidy,, and you need core banking to source the needed funds,” he said.