By Lee C. Chipongian The Philippine National Bank (PNB) will opt for ‘branch-lite’ units this year instead of the traditional regular branches as they focus more on expanding its digital channels. With 692 full branches as of end-2017, including its savings bank subsidiary, bulk of this number or 60 percent are located outside of Metro Manila and only 40 percent are in the capital. PNB executive vice president (SVP) and head of retail banking group, Bernardo H. Tocmo said they are the only bank strategically located all across the country and they could now concentrate on the smaller, less-costly’ branch lites.’ “We plan to open three ‘branch-lites’ by June this year,” he told reporters in a briefing yesterday, after the bank’s annual stockholders meeting. They have more ‘branch-lite’ locations lined up for review but will have to assess the business performance of the initial ‘branch-lites’ before proceeding. The first three will be located in Samal Island in Davao, in Visayas and in Southern Leyte. Last year, PNB added 10 more regular branches, which is on the modest side compared to the top three banks in the country. “We will not open full banking branches this year,” said Tocmo. Putting up ‘branch-lites’ is at least 80 percent lower in terms of costs compared to regular branches. These regular branches costs P20 million in acquiring a license alone, plus P5 million to build. ‘Branch-lites’ only costs P2 million to P3 million including the license per unit. “We are studying more ‘branch-lites’ (and we are still) evaluating (the business model) so we are hoping that in 2019 we will know more,” said Tocmo. The central bank approved the circular establishing ‘branch-lites’ in December last year, which are for low-risk clients. The new guidelines rationalize the current classifications of banking units to expand financial inclusion coverage. The BSP’s ‘branch-lite’ framework includes banks’ extension offices, other banking offices and micro-banking offices. It describes ‘branch-lite’ banks as units that could “provide a wide range of products and services suited for servicing the needs of the market.” Digitalization is another sector that PNB is expanding. At the moment, only 10 percent of its clients are accessing online and mobile banking. The bank wants it increased to 20 percent this year. PNB SVP and head of marketing Norman Martin C. Reyes said digitalization will boost its overseas services since they are seeing an increasing shift in the way their clients abroad are doing banking transactions. “We are concentrating more on digital (for clients overseas), especially with remittances,” said Reyes. The bank has 13 percent market share in the remittance business. Right now, the bank is partnering with technology firms and fintechs in launching new financial products and services for its online channels. Reyes said they have the remittance wallet, for one. “We are looking at companies (as partners) but we are veering away from mere remittances.” The digital platform will cover all of the banks’ cross-sold products. “Our main driver is no longer remittance fees, we’re focusing now on cross-selling.” PNB chief financial officer Nelson C. Reyes said for 2018, they estimate a net income increase of 13-14 percent, same as in 2017. “We do expect profitability at same levels (2017) or 13-14 percent growth driven by the improvement in core income, and growth in loan portfolios by 16-17 percent.” Last year, the bank posted a net income of P8.2 billion, up 14 percent year-on-year. Reyes said their first quarter income – which they will release next month – is aligned to positive growth recorded in 2017, as far as they could see.