Reports
Discussion Papers
No.520 Changes in Source of Profits and Business Strategies? : Some Evidence from the Philippines’ Universal Banks in the 2000s
March 2015
ABSTRACT
In
the
2000s,
the
Philippines’
local
banking
sector
have
conducted
very
conservative
lending
behavior
and
at
the
same
time,
gradually
but
continuously
improved
their
profitability
in
terms
of
ROE
(return
on
equity).
A
set
of
analyses
on
the
flow
of
funds
and
segment
reports
(information)
of
local
universal
banks,
whose
loans
outstanding
to
the
industrial
sector
have
dominated
more
than
three
fourths
of
the
total
outstanding,
shows
that
(1)
they
have
actively
manage
assets
overseas,
(2)
their
profitability
has
come
from
investment
activities
in
the
securities
markets,
and
(3)
some
universal
banks
have
shifted
their
resources
into
the
consumer/retail
segment.
Although
further
refinement
in
the
dataset
is
needed
for
a
more
detailed
analysis,
diverse
business
strategies
would
be
expected
among
the
local
universal
banks
in
the
near
future.
Keywords:
credit
channel,
bank
loan,
the
Philippines’
universal
banks
JEL
classification:
E42,
E52,
G38
Please note that discussion papers are works in various stages of progress and most have not been edited and proofread and may contain errors of fact or judgment. Revised versions of these papers may subsequently appear in more formal publication series. The views expressed in this publication are those of the author(s). The IDE does not guarantee the accuracy of the data included and accepts no responsibility for any consequences arising from its use.