Banks see steady growth, new opportunities this year

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Bankers’ night

Banks are entering the year with cautious confidence, balancing a stable but uneven economic environment against easing monetary conditions, resilient balance sheets and renewed momentum in consumer and small business lending.

Executives from China Banking Corp., Union Bank of the Philippines and Philippine National Bank (PNB) said the outlook remains constructive even as global uncertainties persist, pointing to strong capital positions, manageable asset quality and structural growth opportunities in a still largely underbanked economy.

Leaders of the country’s largest banks shared their views during the 2026 Annual Reception for the Banking Community hosted by the Bangko Sentral ng Pilipinas (BSP) led by Governor Eli Remolona Jr. at the Philippine  International Convention Center on Jan. 23.

In his speech, Remolona highlighted the theme “Innovation, Inclusion, Integrity,” emphasizing that these are vital not only to economic growth but also to financial stability.

The BSP chief also called for continued collaboration to strengthen trust in the financial system

Chinabank chairman Hans Sy acknowledged that the operating environment will not be easy, but stressed that challenging periods often create the best opportunities for banks that stay focused and disciplined.

“It’s not going to be an easy year. But when it’s not easy, that means there are a lot of opportunities,” Sy told The STAR. “These are the times to really focus and stand out.”

Sy remains optimistic about the long-term prospects of the Philippine banking sector, citing the country’s relatively low level of financial penetration as a key growth driver.

He pointed to the large unbanked population as a structural opportunity for banks, not just in retail but also in small and medium-sized enterprises.

“The Philippines is still small in terms of banking penetration, and that’s exactly why the opportunities are big,” he said. “There is still a lot of room to grow.”

On interest rates, Sy said the banking industry would welcome another policy rate cut from the BSP, though he acknowledged the central bank’s need to carefully balance growth and stability.

“We’re hoping for one more rate cut,” he said. “But the Monetary Board has to look at everything. They have to balance all the different factors.”

Chinabank’s strategy, Sy said, remains anchored on fundamentals. Since assuming the chairmanship, he has emphasized a return to core banking principles.

That approach has supported steady portfolio expansion, with Sy seeing continued growth potential despite recent strong performance.

“It’s hard to say faster (loan growth) because we’ve been moving very fast already,” he said. “But I still see double-digit potential.” Asset quality, he added, remains one of Chinabank’s strengths, supported by active board oversight and a balance between caution and growth.

For UnionBank president and CEO Ana Maria Aboitiz-Delgado, the macroeconomic backdrop this year is more supportive than last year, allowing the bank to selectively invest in areas where it sees sustained demand and competitive strength.

“The economy is stable. It’s not super aggressively growing, but I’m more positive this year than last year,” Delgado told The STAR.

“For UnionBank, my outlook is also positive. We see continued pockets of growth where we’re investing, and we will double down on areas where we’re strong,” she said.

UnionBank has spent the past several years repositioning its franchise around digital capabilities and consumer-focused businesses, a strategy Delgado said remains central to its growth plans this year.

She identified possible three main drivers for this year. “We are still traditionally focused on the consumer space. This includes credit cards, wealth management and transaction banking. These are the three big areas of growth for us.”

Despite ongoing investments, Delgado said the bank does not see the need to raise fresh capital in the near term. “Not for now. We’re well capitalized at the moment.”

On monetary policy, she noted that additional BSP rate cuts remain uncertain, but Delgado said lower rates would generally support lending activity and economic growth.

“I think (rate cuts are) positive, especially for clients,” she said. “Lower rates encourage more lending and allow us to bring rates down, making credit more affordable. That helps spur growth in the economy.”

UnionBank also expects lending growth to remain healthy this year, supported by steady demand and disciplined risk management. Delgado said nonperforming loans remain manageable, reflecting prudent underwriting even as the bank continues to expand.

Meanwhile, Lucio Tan-led PNB is positioning itself for another year of strong earnings growth, supported by a strengthened balance sheet, upgraded systems and renewed focus on core businesses.

PNB president and CEO Edwin Bautista said the bank aims to sustain its momentum by expanding its consumer franchise while leveraging its capital strength and recent technology investments.

“If you look at our capital adequacy ratio, we’re pushing 20 percent. We’re overcapitalized,” Bautista said. “That means we don’t have capital constraints. We can be more aggressive.”

PNB completed a major modernization of its core banking system last year, a move Bautista said removes a key bottleneck to faster consumer expansion.

“We fixed our core banking system. We modernized,” he said. “When you go into consumer banking, one of your fears is whether your system can handle the volume. Since it’s modern now, it gives us confidence that we can push this business.”

The bank expects revenues to continue growing at a double-digit pace, supported by wider margins and improving asset quality.

Bautista also sees further efficiency gains ahead, as major technology-related capital expenditures are now largely behind the bank.

“We expect a better cost-to-income ratio because we’ve already completed the upgrade of our core banking system, which accounted for most of our capital spending,” he said.

Looking beyond the near term, Bautista outlined an ambitious but measured goal for PNB.

“We are realistic, but we can get to the top three,” he said, referring to assets, capital and net income. “PNB was number one before. We’ve been there. You want to retain the glory of old, but we’re not in a hurry.”

Taken together, the views of the three bank leaders point to an industry that is neither complacent nor overly cautious.

While economic growth may not be booming, banks are finding room to expand by targeting underserved segments, sharpening their core franchises and taking advantage of easing financial conditions.