illustration by steph bravo
Choosing a bank can be likened to choosing a long-time partner, especially if you plan to take out a loan.
You will therefore need to be cautious and prudent because chances are, you will be tethered to that bank for quite some time. For instance, if you’re planning to tap a home loan with a tenor of 25 years, then you need to make sure that you have a solid, reliable partner for a bank.
Fortunately for many Filipinos, there are a number of established banks in the Philippines today, offering a menu of products and services meant to fit a particular requirement.
Currently, the Philippine banking system is composed of universal and commercial banks, thrift banks, rural and cooperative banks. Universal and commercial banks represent the largest single group resource-wise, and offer the widest variety of banking services, including deposit and investment accounts, credit facilities (loans and mortgages) and card services (credit cards).
Data from local banking giant Metrobank showed that the Philippine universal and commercial banking sector consisted of 43 banks, including 21 foreign bank entities as of end 2017.
The 10 largest universal and commercial banks in the country accounted for over 80 percent of both total assets and total deposits, according to Metrobank.
So if you’re on the lookout for a potential bank partner, it would be best to consider factors such as financial performance, products and services, or even accessibility, to ensure that your hard-earned money will be in good hands.
Financial performance
Several factors are usually considered when evaluating the financial health of a bank.
These may include a company’s liquidity, (referring to the “amount of cash and easily-convertible-to-cash assets a company owns to manage its short-term debt obligations”); debt-to-equity (D/E) ratio (a “measurement of debt against stockholders’ equity;”); and net profitability.
Easily, growth in a company’s profitability often signals reliability and stability.
Take the case of Metrobank. Last year, the Group posted a 23 percent hike in its total comprehensive income to P16.23 billion from the P13.16 billion it recorded in 2016. The said growth can be attributed to the “higher net income of the Group and the P2.11 billion increase in other comprehensive income.”
Meanwhile, loans and receivables, representing 60.83 percent of the group’s total assets as of end 2017, went up by 19.29 percent due to strong demand for loans from all segments. Consumer loans grew by 16.68 percent while commercial loans rose by 19.94 percent.
Nowadays, it’s easier to check the financial performance of your chosen bank, because audited financial statements are part of the reportorial requirement of companies registered with the Securities and Exchange Commission and particularly so for those listed at the Philippine Stock Exchange.
Accessibility
Yes, in this lifetime, you may likely just take up only one home loan or two, whether it’s to purchase a new house and lot or condominium unit, or to refurbish your old home.
But remember, your interaction with your bank doesn’t end there, because after taking up that home loan, you will be repaying it for a long time. And occasionally, you will need ease of access to your bank to consult a home loan expert in case you’re looking at repricing. Accessibility becomes even more crucial in case problems arise.
It therefore matters greatly if your bank will be accessible across various platforms. This time, the competition is no longer just about the geographic footprint, but rather about how easy it is to check your bank records or reach a representative regardless of the interface you wish to use.
For its part, Metrobank continued to expand its distribution channels last year as it sought to retain its leadership.
Metrobank ended 2017 with 703 branches, and consolidated ATM network 1,741. It offers mobile banking, which allow customers to do their financial transactions via Apple iOS and Android devices.
Metrobankdirect, an internet browser-based platform, allows clients to access accounts and do financial transactions at their convenience, while Metrobank-direct Corporate provides companies with online, real-time access to their accounts.
Metrobank also has e-Government Facilities that allow clients to pay their tax dues on tax returns and to electronically remit their monthly SSS, Philhealth and PAG-IBIG contributions and loan payments.
Products, services
There’s quite a competition among banks today. Your decision will depend on which bank, for example, will offer the most ease in loan processing; the most reasonable interest rates for a home loan; flexible repayment terms, among others.
In the case of Metrobank, one can enjoy a maximum home loan amount of up to 80 percent of the property’s selling price and low fixed interest rates for up to 15 years that can protect one from sudden rate surges in the market. Its interest fixing period, which is a good way to protect yourself from shifts in the real estate market, refers to the length of time you want your interest rate to remain the same despite whatever movements the interest rate may experience in the future.
Metrobank also makes your future home within easy reach with payment options of up to 25 years. A Metrobank home loan can be used to purchase a lot, house and lot, townhouse or a condominium unit; and for renovation or expansion, refinancing and reimbursement of renovation expenses.
Promos, innovations
It’s good to look at the promos and innovations offered by banks because such deals would not only allow you to maximize the value of your money, but it would also help you realize your dream home faster and easier.
Sources: www.metrobank.com.ph; www.bsp.gov.ph; www.investopedia.com