China Bank Savings doubles provisions amid expansion push

MANILA, Philippines – China Bank Savings (CBS) is setting aside higher provisions as economic risks persist, while pressing ahead with branch expansion.

During a media briefing on Thursday, CBS president James Christian Dee said the thrift bank doubled its credit provisions this year as it braces for risks from a weaker economy and geopolitical tensions.

READ: China Bank Savings earnings jumped 11.5%

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“Despite the developments in the Middle East, the recent signing of the peace deal, we’re still quite cautious,” Dee said, noting that the bank would continue building up provisions in the coming months as it monitors economic conditions.

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The higher provisioning, however, has been supported by stronger earnings. Dee said revenues were up 20–30 percent from a year ago, giving CBS room to bolster buffers against potential credit losses.

The thrift banking arm of Sy-led China Banking Corp. aims to raise its provision coverage ratio to 90–100 percent within three to five years as part of its risk strategy.

Despite the more conservative stance, CBS is not putting its growth plans on hold.

CBS plans to add about 15 branches a year—10 conversions and five new sites—as it works toward a network of over 200 branches. Dee said the bank hopes to reach about 220 branches within the next few years.

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The expansion comes alongside continued investments in digital banking. CBS has enhanced its digital capabilities through a 24/7 chatbot and an expanded automated deposit machine (ADM) network. Dee said the bank is pursuing these initiatives to improve customer accessibility and complement its branch network.

CBS Chair Ricardo Chua said the bank uses China Bank Group’s digital platforms to drive expansion.

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Still, management remains focused on asset quality over aggressive growth.

Still, Chua said the bank expects modest loan growth amid inflation and economic headwinds. He emphasized that safeguarding asset quality remains a bigger priority than chasing faster expansion.

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Meanwhile, he noted that much of CBS’ loan portfolio consists of salary-deduction loans, which have historically posted low default rates. With prudent underwriting and a focus on retail lending, the bank expects asset quality risks to remain manageable. /pai INQ