Instead, the country's dominant lender will fight for the retention of its market leadership here, protecting it from bigger banks in neighboring countries belonging to the Association of Southeast Asian Nations (ASEAN).
BDO on Thursday, April 20, saw its net income increase by 6% to P5.8 billion in the first quarter of 2017, mainly due to higher lending during the period. In 2016, the Sy-family lender booked P26.1 billion in net income, from P25.05 billion recorded a year ago.
"10 years ago, BDO was just a fringe in the banking industry. Now, this is where we are," BDO president and chief executive officer Nestor Tan said in a media briefing in Makati City on Thursday.
But even the country's largest bank in terms of total assets is paranoid over bigger ASEAN banks entering the Philippines.
"Yes, we are paranoid. That is the reason we are accelerating our investments. We believe we have a headstart, but at some point, it won't last for long," Tan said.
Paranoid over Southeast Asian giants
Over the years, BDO has entered into agreements with foreign and local banks to secure more clientele – the latest of which is its partnership with Japan's Shinkin Central Bank in March this year. (READ: Global investment firm TPG Growth takes 40% stake in BDO unit ONB)
In 2015, BDO also acquired One Network Bank, which caters to those who are living in central and southern Mindanao.
Its strategy is to focus on retaining its leadership here in the Philippines, instead of testing uncharted waters, Tan said.
"Why are we focusing on building our scale here? Well, look at the numbers. Deposit growth is at 15%, loan growth at 21%, CASA (current account savings account) growth also at 21%. You ask yourself why take the risk of going into other markets that are much less than that?" he added.
"Hypothetically, if you look at a bank like BDO and I go to a market like Singapore, do I have anything special that will allow me to compete aside from [catering to] OFWs (overseas Filipino workers)? Not much."
Tan however clarified that his firm is not closing doors when it comes to expanding outside the Philippines.
"But that does not mean that we won't. [It's just that] at the moment, we are very focused on the local market," he said.
Tan even said BDO wants the Qualified ASEAN Banks (QABs) status. The Bangko Sentral ng Pilipinas (BSP) defines QAB as "strong and well-managed banks, headquartered in ASEAN and majority-owned by ASEAN nationals."
For the BDO chief, foreign banks could find it difficult to enter growth markets here in the Philippines.
"It will be very difficult for a foreign entity to go into a growing city. And if you've looked at the foreign banks we have for quite a while, Citi, HSBC, Standard Chartered, they have not been able to penetrate markets outside the National Capital Region, Cebu, or Davao," Tan explained.
"It is not because they are not competent. It is because the cost of doing it is substantial and it will take years before you get your returns back," he added.
BDO has one of the largest distribution networks, with over 1,000 operating branches and over 3,000 automated teller machines nationwide. It also has 26 remittance and representative offices outside the Philippines. – Rappler.com