BDO’s rural unit lays out P195M on network expansion

The rural banking unit of Sy family-led BDO Unibank Inc. is investing P195 million to put up more branches in mostly provincial communities across the country as it gears up for aggressive growth this year.

BDO Network Bank (BDONB) president Jesus Antonio Itchon told the Inquirer last week that they planned to open 39 more branches this year.

So far, the country’s largest rural bank has opened 39 branches out of its goal of growing its network by 78 by the end of the year.

BDONB currently has 431 branches scattered in the country’s three island groups, with 189 in Luzon, 98 in the Visayas and 144 in Mindanao.

“On average, we spend about P3 million to P5 million [to build a new branch],” Itchon said, adding that they needed to keep BDONB branches small due mainly to limited land and building availability in the provinces.

Depending on the size, some branches are manned only by three employees compared with the flagship BDO branches that have up to 50 employees, according to Itchon.

BDO took over One Network Bank in 2015 for P6.7 billion before rebranding it to BDONB to attract more clients. Before that, One Network Bank was led by the Consunji family and had only 98 branches exclusively in Mindanao.

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Loans to retail customers

BDONB currently offers loans to retail customers, as well as MSMEs (micro-, small- and medium-sized enterprises), most of which are “sari-sari” store owners in rural towns.

Customers may borrow from P30,000 to P1 million at an interest rate of up to 3.5 percent per month. This is less costly than the current benchmark rate of big banks at 6.25 percent.

These loans are payable up to three years. BDONB’s loans are also often unsecured, meaning the borrowers do not have any collateral to commit in case they default on the loan.