Breakout year for Sun Savings Bank

THE year 2022 turned out to be a breakout year for Sun Savings Bank, as it total assets grew by 47 percent to reach an all-time high of P3.04 billion from just P2.07 million, in the prior year.

The growth in assets was driven primarily by loans receivables which increased by 67 percent to reach a record level of P2.35 billion. The exponential growth in interest earning loans was due to higher loan demand from the Department of Education (DepEd) personnel, who were allowed to borrow up to a maximum term of five years, thereby increasing significantly their capacity to borrow under the DepEd Automatic Payroll Deduction System.

Since loan collection is assured under the APDS, the quality of the loan portfolio improved further as the non-performing loan ratio slid down to 2.8 percent, from 3.6 percent the year before.

On the liabilities side, total deposits increased by 18 percent to P1.75 billion as the bank’s deposit products continued to attract depositors looking for yields that will protect the value of their hard-earned money against rising inflation.

The bank’s five-year time deposit offering a rate of seven percent per annum, tax-free, attracted the most funds from depositors, as it was 140 basis points higher than the year-to-date inflation rate of 5.4 percent. Total bills payable to banks increased to P761 million as the bank availed of its credit lines from Land Bank, DBP, Robinsons Bank and RCBC to meet the surge in loan demand from DepEd personnel.

Total shareholders equity also increased by 23 percent to P455 million compared to the previous year. This was due primarily to the shareholders who infused an additional P72 million in paid-up capital into the bank to ensure that the phenomenal growth of the bank was supported by a solid capital base. This resulted in a capital adequacy ratio of 17 percent, which was way above the BSP requirement of 10 percent.

Given the exponential growth of its high quality loan portfolio and stable funding base of deposits and shareholders capital, the bank more than doubled its profits to P53 million in 2022 as compared to the 2021 level of P25 million.

For 2023, the bank expects to maintain its high-growth trajectory with its major initiatives. Its first target is the mobile banking app which will be offered by the first quarter of 2023. The bank believes that it can attract new customers with substantial deposits, looking for rewarding interest rates and the convenience of a digital bank account.

The second initiative is the expansion of its banking reach to Deped personnel in the northern and western sections of Cebu province, and the bank’s third aim is the diversification of its loan portfolio to include agri-value chain borrowers, with credit support from PhilGuarantee.

The bank’s fourth target is the expanded use of information technology for process improvement and delivery of financial services to its customers. Finally, the bank is strengthening its human resource base through relevant training and hiring of talented and highly motivated staff. (PR)