Rizal Commercial Banking Corp. (RCBC), ranked ninth largest by assets among private banks and fourth or fifth in the remittance business, looks to scale back its remittance cost to win a larger portion of the multibillion-dollar market.
RCBC First Senior Vice President and Global Transaction Banking Group Head Manny Narciso said the lender now offers a more competitive exchange rate than its peers such that some migration was bound to happen in its favor as some point forward.
He said these developments were to ramp up competition by a significant degree down the line, as remittance fees trend lower and its foreign currency exchange rate prove better than its rivals.
According to Narciso, RCBC owns 9-percent market share for its remittance business and targets to widen this some more to 10 percent by 2016.
BDO Unibank owns the largest share of the remittance pie followed by the Metropolitan Bank and Trust Co., then the Bank of the Philippine Islands (BPI) and finally, the Philippine National Bank. He said, when banks fight for market share, two things—the price and the exchange rate matter.
“We have the advantage in terms of exchange rate. We are competitive on that. When it comes to fees, we’re trying to be flat or lower than the competition. We’re trying to find ways to keep [the fee] steady or lower. With [better] exchange rate and fees plus convenience and accessibility for the clients, we can win more business,” he said.
“We want to grow steadily and increase our market share every year,” the executive quickly added.
RCBC targets a 20-percent growth in remittances in 2016. He, likewise, said handling an estimated $2.5 billion up to $2.6 billion in such remittances by year’s end should be doable.
“Internationally, we feel we’re not that strong in the markets that are already established and we want to get more market share there. If ever it becomes saturated, that’s when we will look for new markets. Overseas, we will push for more market share in the Middle East, Asia and Europe,” Narciso said of their near-term plans.
The Middle East is the bank’s largest market, contributing 35 percent of aggregate; Europe contributes another 32 percent; Asia, 22 percent; America, 10 percent; and others just 1 percent.
As of end-September 2015, the volume of remittances from the United Kingdom grew 102 percent, while Hong kong showed growth of 112 percent. Remittance from Japan grew 1,503 percent, or 16 times the volume of last year; Taiwan, 53 percent, while the Middle East showed flat to single-digit growth.
In Taiwan, Narciso said, when workers want to remit even at night, they can do so using Family Mart outlets, which are open 24/7. RCBC is rebuilding its business in the US and will be launching its tie-up with the Xoom brand within this month.