1.

Environmental Analysis
Economic Forecast (Opportunity)
Standard Chartered Asia economist Jeff Ng said that the 2015 Philippine economy
will remain anchored amidst the tempest in the global financial system resulting
from the frequent adjustments in US interest rate.
Mr. Ng pointed out that provided vital infrastructure investments are laid in place,
The Philippines may likely reach the higher end of the projection this year. We
expect the Philippines to still outperform the rest of its Asean neighbors. Its a bright
spot in Asia. He added, The Philippines is seen as a standout.
Relevance: Standard Chartered Bank has strong confident to stay their business in
the Philippines due to good economic development and improving standards of
living, poverty levels in emerging market economies (EMEs) are dropping. High
opportunity to reach their target market because of high consumer market and
investment potential in an economy. The bank expects the Bangko Sentral ng
Pilipinas (BSP) to increase interest rates by 50 basis points by the fourth quarter of
this year, as major economies continue to adjust their monetary policies as concern
over the world economic growth linger.
Philippines GDP Growth Rate rise up to 6% in 2015
The Philippines GDP advanced 1.1 percent in the third quarter of 2015, down from
an upwardly revised 2.0 percent expansion reported in April to June and below
market expectations. While the agriculture sector further contracted, growth in the
services and industry sectors slowed. GDP Growth Rate in Philippines averaged 1.17
percent from 1998 until 2015, reaching an all-time high of 3.30 percent in the first
quarter of 2010 and a record low of -2.40 percent in the first quarter of 2009. GDP
Growth Rate in Philippines is reported by the Philippine National Statistical
Coordination Board.

The Philippines has a status of emerging economy. In recent years, the country has
been steadily growing mainly due to inflow of foreign direct investment and
remittances. The Philippines is the worlds largest center for business process
outsourcing. The country also has a strong industrial sector based on the
manufacturing of electronics and other high-tech components for overseas
corporations. The Philippines is rich in natural resources; it has significant reserves
of chromite, nickel, copper, coal and oil. This page provides - Philippines GDP
Growth Rate - actual values, historical data, forecast, chart, statistics, economic
calendar and news. Philippines GDP Growth Rate - actual data, historical chart and
calendar of releases - was last updated on December of 2015.
Relevance: Philippine banks remain well capitalized; it is to note that the
Philippine market is booming because of since different and massive transactions
from individual and business consumers. This is a good inhibition that more
businesses can merge and thus, the more competitive the banks can be to cater to
potential.
Philippines Inflation Rate Steady for 2015 and have the lowest rate for the
last two decades (Opportunity)
Philippines annual inflation rate was at 0.4 percent in October of 2015, the same
pace as in the previous month and below market expectations. It is the lowest figure
since April 1987, as an increase in cost of transport and a slower decline in cost of
housing and utilities offset a further slowdown in cost of food and non-alcoholic
beverages.
Year-on-year, prices rose for: alcoholic beverages and tobacco (+3.7 percent in
October from +3.6 percent in September), clothing and footwear (+2.2 percent from
+2.1 percent), health (+1.7 percent from +1.5 percent) and transport (+0.1 percent
from -0.3 percent). In contrast, prices declined for housing, water, electricity, gas
and other fuels (-2.1 percent from -2.2 percent). While prices remained unchanged
for communication, cost was steady for education (+3.6 percent) and restaurant
and miscellaneous goods and services (+1.2 percent). Prices moderated for:
heavily-weighted food and non-alcoholic beverages (+0.7 percent from +0.8
percent); furnishing, household equipment and routine maintenance (+1.5 percent
from +1.6 percent) and recreation and culture (+0.9 percent from +1.0 percent).
From January to October 2015, inflation was 1.4 percent, below the central bank's
target range of 2.0 percent to 4.0 percent for this year.
Core inflation was recorded at 1.5 percent year-on-year in October, up from 1.4
percent in September.
On a monthly basis, consumer prices increased by 0.1 percent, following a 0.2
percent drop in September. Prices rose for: food and non-alcoholic beverages (+0.1

percent), alcoholic beverages and tobacco (+0.3 percent), clothing and footwear
(+0.1 percent), health (+0.2 percent) and restaurant and miscellaneous goods and
services (+0.2 percent). While prices steady for furnishing, household and routine
maintenance (+0.1 percent) and transport (+0.2 percent), cost remained
unchanged for housing, water, electricity, gas and other fuels, communication,
recreation and culture and education.
Relevance: Standard Chartered Bank can see this trend as an opportunity to
engage customers and investors members especially businesses in who needs more
disposable income. The higher the inflation rate equates to higher cost of living and
the value of money depreciates fast. Inflation tends to increase spending and
encourage borrowing at the expense of savings or consumption.
Foreign Exchange Reserves and Exchange Rate increased in 81,142.30
USD million (Opportunity)
Foreign exchange reserves in Philippines increased to 81,142.3 USD million in
October from 80,550.5 USD million in September of 2015. It is the largest figure
since December 2013; mainly due to the national governments net foreign currency
deposits and revaluation of gold holding and income from overseas investments.
The country's central bank expects its foreign reserves to hit 81,600 USD million at
the end of 2015, following a 79,500 USD million a year earlier. Foreign Exchange
Reserves in Philippines averaged 13468.58 USD Million from 1960 until 2015,
reaching an all-time high of 85273.61 USD Million in January of 2013 and a record
low of 44.07 USD Million in December of 1961. Foreign Exchange Reserves in
Philippines is reported by the Bangko Sentral Ng Pilipinas.

In Philippines, Foreign Exchange Reserves are the foreign assets held or controlled

by the country central bank. The reserves are made of gold or a specific currency.
They can also be special drawing rights and marketable securities denominated in
foreign currencies like treasury bills, government bonds, corporate bonds and
equities and foreign currency loans.
Relevance: One of the main sources of income of Standard Chartered Bank is in
foreign exchange.

Stable Peso in 2015 (Opportunity)

The bank said that the current BSP policy and SDA rates will have a relatively muted
impact on the peso.
The bank said the peso has been the best performing Asia ex-Japan currency since
end-September 2014, buoyed by strong macroeconomic fundamentals, robust
remittances and the positive impact of lower oil prices.
Accordingly, we expect the USD-PHP to remain range bound even in a stronger USD
environment. The bank forecast the USD-PHP at 45 in mid-2015 and 43.50 by end2015.
Relevance: Standard Chartered Bank has transactional currency exposures. The
firms purchases in currencies and certain expenses are billed by their affiliates in
foreign currencies. Stronger peso is beneficial to the company since its
disbursement for foreign suppliers are in dollars. This can also bring banking sectors
to develop ways on how they can innovate their products and services by means of
advertising or other media tools that can help increase the revenues

Philippines has become a regional hotspot for equity market activity

As per Times Inc. newsgroup, Philippines will be the New Asian Tiger. A beautiful and
industrious country, the Philippines is dazzling markets with its open business
climate, impressive economic performance, and huge opportunities across a range
of sectors
Having clawed itself back from the Asian financial crisis of 1997, the new Asian tiger
is poised to drive future growth in the region. With a full set of credit upgrades
awarded in 2012 by the international credit agencies, the Philippines looks set in
2013 to receive investment grade status, marking a prosperous new chapter for the
country. Thats not to say 2012 has been without significant achievement. The
country reached No. 44 on the list of the worlds largest economies, and if current
trends hold, it could jump to 16th place by 2050, according to HSBCs report The

World in 2050 published this year.

Relevance: There is a clear trend that countries in the Southeast Asia, such as
Philippines will grow and build their financial potential causing a lot of changes in
the market infrastructure and investment activity and this is where SCB plays a
critical role in providing market leading advice on equity and financing solutions
2. Socio Cultural Forces
The countrys demographics will provide a boost to consumer spending in
the medium term (Opportunity)
Consumer Spending in Philippines increased to 1321980 PHP Million in the third
quarter of 2015 from 1301703 PHP Million in the second quarter of 2015. Consumer
Spending in Philippines averaged 887607.46 PHP Million from 1998 until 2015,
reaching an all-time high of 1321980 PHP Million in the third quarter of 2015 and a
record low of 581457 PHP Million in the first quarter of 1998. Consumer Spending in
Philippines is reported by the Philippine National Statistical Coordination Board.

The Philippine economy is expected to strengthen its growth this year on the back
of robust consumption and exports data.
We expect bubblier consumer spending in the coming quarters as a result of high
job generation and drastically lower inflation due to the collapsing crude-oil prices,
said a joint report by the First Metro Investment Corp. (FMIC) and the University of
Asia and the Pacific (UA&P).

The Growing Trend of Internet Marketing (Opportunity)

The Philippines according to the Asia Digital Marketing Association (ADMA) and the
Internet World statistics, there are over a billion Internet users in the Asia Pacific
region, which amounts to over 46% of the total Internet users in the world.
The Philippines, specifically has over 44.2 million users, the second highest ranking
in Southeast Asia and the 6th in the whole of Asia. The population is forecasted to
double by 2016, according to Julian Persaud, former Google Managing Director in
Southeast Asia.
The January 2015 "Digital In the Philippines" snapshot of We Are Social counts that
among the total Philippine population of 100.8 million (with urbanization at 49%),
there are 44.2 million active Internet users. Of these 44.2 million Internet users,
90% have active social media accounts.
In the last four years, Internet access in the Philippines has grown by 500%, the
fastest rate in Southeast Asia, but as mentioned in previously, real growth is yet to
come but it's coming by fast.

Philippines are leading in numbers. While we're yet to see the majority of the
Philippine population online, enough data supports how addicted the Philippines is
to the digital life. According to We Are Social's Digital Report as of January 2015, the
Philippines leads in average "Time Spent on the Internet" through laptop and
desktop, and one of the highest via mobile worldwide.

From a global average of 4.4 hours/day, the Filipino spends an average of 6.3
hours/day online via laptop and 3.3 hours/day via mobile

Relevance: The growing trends now for Filipinos are conscious awareness in health
and wellness. Regardless of the status an individual belongs to, awareness on
healthy living is whats driving the market. Standard Chartered Bank recognizes the
trend as an opportunity to come up with products or promos on credit cards that will
cater to that growing market

Local operators are in the best position to win in the local market due to
their extensive network infrastructure
Domestic banks such as BPI, BDO and Metro bank also have an advantage over
their foreign counterparts, as these home grown financial institutions have more
branches and lower requirements for initial deposit
Relevance: and maintained balance, making them more attractive to consumers.
Offering more advanced and secure card technology, as well as emphasizing the
ability to use the debit card overseas a feature that is not provided by most local

companies may be one of the ways for multinationals to capture shares in the
category.
In general, foreign banks have their own limitation when it comes to expanding their
market share in the country. They are bound by laws, which slow down their growth
and market expansion. Currently, a foreign bank is mandated by law not to exceed
7 local branches across the country, that limits their network and market
accessibility.
3. Political Legal Forces
Low level of public debt allows government to boost spending during
slowdown (Opportunity)
Bangko Sentral to monitor banks' business risk compliance more
closely (Opportunity)
Implementation of Basel III (Threat)
The building blocks of Basel III are: (i) higher quality and level of capital, (ii)
widened risk coverage, (iii) prevention of excessive leverage, (iv) stronger liquidity,
(v) addressing of systemic risk, and (vi) higher standards for risk management and
supervision.10 These are expected to enhance capital and liquidity regulations of
the banking system and therefore reduce the intensity and frequency of financial
crisis.
According to MAG (2010a), banks are likely to use a combination of these
methods. The choice may in part depend on the length of time over which capital
needs to be increased. A longer implementation period will give banks more
flexibility as regards the mechanisms they can use to achieve targets. Thus, if Basel
III is implemented over longer periods, output effects are expected to be smaller
than
if
implemented
over
shorter
periods.
(http://www.bsp.gov.ph/downloads/publications/2012/wps201202.pdf)
Relevance: Currently, SCB is at Basel II level for which they need to initiate a lot of
capital raising activities which may be risky for the bank. To meet the requirements
of the Basel III reform, there is an expansion of assets considered as liquid to
include investment grade corporate bonds, shares and high quality mortgage
securities.

4. Technological Forces
Bitcoin / Block chain Technology (Threat)
Bitcoin / Block chain Technology (Opportunity)
Strong Business Process Outsourcing growth

Industry Analysis and Competitor Analysis

The Philippine Banking System

Industry Trends and Problems in the Banking Industry

As 2015 gets under way, it is time to take stock of some of the biggest
challenges facing the banking industry this year including cyber-crime,
cultural change, more stress testing, ever-increasing regulatory scrutiny
and a troubled economic outlook in Asia, Europe and the Middle
East, writes Aamir Khan.
1. Cyber-crime Facing the New Wave of criminal
It is now exceptional to read about a bank robbery where criminals have entered
into a bank branch and physically taken money out of the building. The introduction
of more effective security systems, such as bullet proof windows and barriers and
closed-circuit television, means that only the foolhardy would risk trying to steal
from a branch.
Unfortunately, that does not mean that the banking sector is safe. On the contrary,
the banking sector is facing a more serious threat where the perpetrators do not
even need to physically enter the branch. The IT systems of the banks are now the
focus of determined criminals who can transfer millions of pounds (or indeed any
currency) within seconds to different accounts and move money across jurisdictions
and borders with a few strokes of a keyboard. The full extent of the threat of cybercrime is only emerging and is almost certainly going to hit the headlines in 2015.
With IT systems of the larger banks under scrutiny for failures and inadequate
controls, it is open to question whether the level of security and infrastructure will
be sufficiently robust to withstand the challenge of cyber-crime.
2. Effecting cultural change
Tracey McDermott, head of enforcement at the Financial Conduct Authority, put it
most succinctly: The cultural change we are looking for is perhaps analogous to the
shift in attitudes to drink-driving between my parents generation and my own. For
my parents and their peers, reluctance to have a drink and get behind the wheel
was mainly because they were scared of being caught For my generation,
however, drinking and driving was presented as a moral issue. We were made to
think about whether it was right or wrong by forcing us to focus on the impact it
could have on others lives.
Whilst every chief executive of every bank has spoken of their desire to put
customers first and change the culture within their organization, no one has
explained how they intend to do this in practical terms. Will next year be the one
where that change begins? It has to be if the banking sector is going to regain the
trust of the public and their customers. My prediction is that technology will be the
driver for this cultural change with every sale and every trade checked for the
misdemeanors of the recent past.

3. More stress testing

One of the conclusions reached after the banking crisis of 2008 is the notion that
banks need to have greater capital reserves to avoid being too big to fail. As a
consequence banks have undergone stress tests and required to hold ever greater
amounts of capital. This avoids dealing with the more thorny issue of the interrelationships within the global banking community and how one bank can be
intrinsically linked to a host of others. The weakest link may yet still be capable of
threatening the stability of the worlds banks. However, for the time being the major
banks will need to comply with the current and future requirements of capital
reserves.
The full knock on effect of these requirements will come to light in 2015 particularly
if the predicted growth rates for the major economies of the world slow further.
4. Dealing with heightened regulatory scrutiny
With 2014 seeing record fines for LIBOR and FX rigging, the banking community
would like to think it has seen the last of the scandals. Unfortunately, the one thing
we can safely predict is that there will be more regulatory investigations and issues
to surface in the next year as regulators across the globe continue to scrutinise the
current and past behavior of banks. It is likely that 2015 will see a number of
individuals facing prosecutions for their part in the major scandals of 2014.
Banks will have to continue to invest heavily in compliance and risk monitoring to
ensure that they can deal with this increasing regulatory scrutiny.
5. Facing another economic downturn?
As China faces more unrest in Hong Kong while its economy has been slowing down
coupled with Russias own economic woes, the outlook does not look promising. The
Western economies are struggling to meet predicted growth rates and instability in
the Middle East continues cause concern. Nor is it clear how long the historically low
interest rates and fiscal engineering across the globe can be maintained.
How will the banks fare with a new downturn in the global economy? Stress testing
and capital requirements will complicate matters, as banks have to step up and play
their part in helping individuals and companies. We can only hope that they are able
and willing to do so. (http://www.bankingtech.com/270792/five-challenges-for-thebanking-industry-in-2015/)
2015 Retail Banking Trends
This is the year when banks can differentiate themselves through customer-focused
strategies.
Excellence and Customer
In 2015, we foresee the acceleration of a trend thats been under way since the end
of the financial crisis: the increased commoditization of retail banking products. This

new reality is putting pressure on banks to distinguish themselves in an intensely

competitive, low-growth, low-margin environment.
In response, banks are shifting from the traditional product focus to a more clientcentric strategy. Although most banks have virtually identical products, their
customers are obviously distinct and, hence, offer these firms a pathway for
differentiation. Banks that cultivate a deep knowledge of their customers their
financial-services preferences, economic demographics, and consumer behavior
can tailor offers to individuals in a timely manner based on activity in their accounts
and lifestyle changes or choices.
Banks are adjusting to the new regulatory environment, and cyberbreaches are taking center stage.
This consumer-focused approach can improve revenue by attracting new customers
and increasing the banks wallet share of existing customers. Whats more, greater
marketing precision can direct banks spending more efficiently and help control
costs.
In parallel with this commoditization/differentiation trend are continued regulatory
changes and a steady stream of data breaches that, according to a November 2014
letter from two U.S. lawmakers to 16 financial institutions seeking information on
cybercrimes, resulted in the theft of 500 million financial records in the prior 12
months. By now, most banks are adjusting to the new, more costly regulatory
environment, and cyber-breaches are taking center stage and are starting to divert
significant resources from activities focused on revenue growth.
The customer is core
Given these challenges, its vital for banks to be clear about what customer
centricity means, how to become customer-centric, and how to convert these
efforts into profits. Bank leadership must also find ways to support growth initiatives
while funding the nonnegotiable regulatory and data security work.
Its not an easy agenda; it will require transformative change at many institutions,
both operationally and culturally. But we believe that a path exists for banks that
want to tackle these issues effectively and improve efficiency ratios. In our
experience, the most successful initiatives share five tactical themes:

Clear and consistent focus. Too often banks try to be all things to all people. But
that doesnt work. Banks must define their strategy, make trade-offs in
building capabilities (strategy+business), make clear decisions about where to
invest their dollars, and relentlessly manage performance.
For example, one large bank in the United States decided to focus on convenience,
innovation, and simplicity. To this end, it has standardized platforms and processes
to reduce cycle time, targeted multichannel delivery to give consumers a range of
options and devices for managing their accounts and communicating with the bank,
and elected to innovate and invest in technology to grow revenue and reduce cost.
Meanwhile, another top-tier U.S. bank has chosen a different, more high-touch
customer approach, adding value through the expertise of its employees and their
relationships with consumers. Consequently, this bank has a branch-based system
with relatively limited investment in alternative channels, an unambiguous incentive
model to drive sales and service, and a strong performance management culture
with an emphasis on profitability.

The purpose of data models is to transition employees from a service to a

sales mentality.
Bias toward results. A growing number of banks are integrating analytics across
the firm to standardize decision-making processes, improve consistency, and
increase sales. The purpose of these data models is to transition employees from a
service to a sales mentality, particularly as more channels are filled with self-service
features.
Specifically, analytics can drive greater value in:

Setting up goals using branch performance benchmarks based on the results

at peer branch networks

Developing lead lists to identify opportunities

Acquiring and deploying talent

Learning best practices faster

For example, one major bank in the United States has invested in frontline
productivity to drive aggressive cross-selling goals. Between 2003 and 2011, the
bank increased its full-time equivalent (FTE) positions by 90 percent, thus lowering

the number of households served per FTE by 32 percent. During this time, the bank
conducted a detailed analysis of the number and type of products sold per
household and built on the findings to generate ambitious sales targets. By
rebalancing the workload and implementing more rigorous sales goals, it increased
the number of new products sold per FTE daily from 4.6 to 6.7, and grew the
number of banking services per retail household by more than 45 percent.
Executional excellence. Increasingly, banks must identify and address sources of
complexity. The first step is to reduce or eliminate product variety that makes the
business more cumbersome and less efficient or that doesnt create adequate
value. Next, standardize IT and operations using common processing architectures,
deploy IT resources optimally, and put an operating structure in place that enables
scale. Finally, simplify processes for clients and employees.
For example, another top-tier domestic bank automated end-to-end client onboarding to increase capacity and reduce cost. The results included an 80 percent
reduction in client on-boarding cycle time; a 50 percent reduction in management
overhead; a 40 percent increase in throughput capacity; the elimination of more
than 60 percent of manual steps; improved visibility of client status during the onboarding process; and a new ability to capitalize on lessons learned from previous
client on-boarding.
Smart partnering. As banks look for growth, they must determine which
capabilities they want to build on their own to differentiate themselves, and which
they should leverage through third-party partnerships to address consumer pain
points or achieve savings. For example, a large European bank recently outsourced
its procurement function in order to improve procure-to-pay process efficiency and
enforce pricing and billing compliance, while freeing itself to build a competitive
advantage in its core consumer and commercial operations.
The multiyear agreement will manage more than 5 billion (US$6.2 billion) in
external spending, and impact 4 million annual transactions across 200 legal
entities. The net result was a savings in excess of 200 million (US$247 million).
Ruthless performance management. Successful banks develop clear datadriven metrics, implement regular assessments, and impose accountability and
consequences. For example, one large U.S. bank designed detailed metrics for
tracking customer call center wait time and customers serviced per FTE. Bank
management reviews the data monthly and uses the findings to address
shortcomings and set new goals.

This bank and others with a similar approach are using a step-by-step process to
operationalize performance management, a process that includes defining and
socializing key metrics; developing clear adoption plans; establishing the frequency
of performance assessment meetings and determining the participants; developing
meeting agendas and content based on the key metrics; defining process roles; and
aligning incentives and consequences for meeting or not meeting goals.
(http://www.strategyand.pwc.com/perspectives/2015-retailbanking-trends)
The Emerging Digital Banking in Asia

About 40 percent of Asian mass affluent customers now prefer online or

mobile banking; among those under 40 years of age, around half prefer
digital banking. Digital-banking consumers number 670 million today in Asia
and are expected to become 1.7 billion by 2020.
Online consumer sales in Asia have exceeded 20 percent in some categories,
including electronics. In banking, some leaders are experiencing online sales
in this proportion for key products. The disruption caused by digitization can
create or destroy significant value for banks, depending on their starting
positions and how well they respond to shifting consumer behavior and other
trends. Experience is showing that 30 to 50 percent of net profit is at risk.
Banks can create significant value in digital banking using a range of
approaches, from digitally enabling their current model, allowing higher
salesforce productivity, to adopting disruptive new propositions, such as new
consumer concepts for targeted segments.

A generation of digital-banking customers is rising across Asia, hundreds of millions

strong. This generation will be the most populous and wealthiest generation in Asian
history. Its constituents will want to manage their money and make payments
through mobile and online channels, anytime, 2 anywhere. They will want full digital
access to the latest offerings and a more personalized set of products and services.
Key Competitors of Standard Chartered Bank
CITIBANK
Company Background
Citi's history in the Philippines dates back to 1902 when the International Banking
Corporation established a branch in Manila, followed by another branch in Cebu in
1904. Today, Citibank is the largest foreign commercial bank in the Philippines in
terms of customers, assets, revenues and domestic branch presence. It is the only
foreign commercial bank that figures consistently in the top ten commercial banks
in the country. Citi Philippines employs close to 4,800 staff, 99% of whom are
Filipinos.

The Institutional Clients Group is a recognized leader in arranging

financing and capital markets transactions as well as providing financial
services and advisory for the sovereign and public sector , top tier local
corporations, multinationals and other financial institutions. If offers
innovative end-to-end cash management solutions, trade finance, securities
custodianship and funds services, and the most comprehensive suite of
treasury products including foreign exchange, fixed income, commodities
and structured products.

With six full-service branches and a track record for innovation and customer
service, Citibank's consumer banking presence in the Philippines spans
leadership in credit cards, wealth management and a growing franchise for
consumer finance. The Regional Consumer Bank offers retail loans and
deposits, personal investments, insurance, consumer branch services and
lifestyle convenience products and financial services such as credit cards and
Citigold wealth management banking. It is the single largest credit card issuer
in the country. To complement its commercial bank presence in the country,
Citi has a network of 36 retail bank branches and loan Centre through
Citibank Savings to better serve the financial needs of the mass
affluent with its world-class suite of banking products and services.

In addition, the Philippines is the regional hub for: a) Citi Shared Services
(CSS), the global processing Centre performing financial reporting operations
and payment services, supporting 92 countries across the Americas, Asia
Pacific, Japan, Europe, Middle East, and Africa; b) Citi Employee Services
(CES), the regional processing Centre for employee data, HR Administration
and payroll services for 62 countries across the Asia Pacific, Japan, Europe,
Middle East, and Africa; c) Asia Pacific Credit Risk management services and
analysis serving 16 countries in Asia Pacific; d) Asia Pacific Compliance Centre
of Excellence providing standardized market surveillance, monitoring of
employee trading activities, information barrier surveillance and training
administration support to 14 countries in the Asia Pacific region, and e) the
Citi Center for Advance Learning, the in-house training center for Citi
professionals in the Asia Pacific region

Citi Business Process Solutions is another Philippine-based entity which

provides Business Process Outsourcing, Sales, Service, Collections, Credit
operations and back office operations for various Citi entities around the
globe including Australia, the United States and Guam. CBPS set up the
regional CitiPhone Command Center serving 12 countries in Asia Pacific
through workforce management, planning and scheduling initiatives.

An active corporate citizen in the Philippines, Citi's citizenship activities focus on:

Microfinance and micro-entrepreneurship - helping individuals become

economically self-sufficient

Small and Growing Businesses - helping small enterprises grow and create
more jobs; supporting green enterprise development that generates 'triple
bottom-line' economic, environmental and social benefits

College and Careers - expanding educational opportunities leading to

improved academic achievement and better employment prospects

Financial Capability and Asset Building - helping individuals establish financial

plans, maintain financial goals and make informed financial decisions.

Citi employee engagement and spirit of volunteerism are manifest in its

regular involvement in community service as well as immediate disaster relief
response.

The Hong Kong and Shanghai Banking Corporation Limited Philippines

Company Background
Established in Hong Kong in March 1865 and in Shanghai a month later, The Hong
Kong and Shanghai Banking Corporation (HSBC) is the founding member of the
HSBC Group and the Group's flagship in Asia. The HSBC Group, with around 8,500
offices in 86 countries and territories and assets of US$2,422 billion as at 30 June
2009, is one of the worlds largest banking and financial services organizations. To
know
more
about
the
HSBC
Group
HSBC began operating in the Philippines in November 1875, in Binondo. A second
branch was opened in Iloilo to serve the growing sugar industry. In 1971, the main
branch in Binondo was moved to Makati City. Ten years later, in 1981, the Iloilo
branch was closed and a new branch in Ortigas Centre was opened. Following the
introduction of the Foreign Bank Liberalization Act of 1994, HSBC re-opened a
branch in Binondo in 1995 and established a branch in Cebu in 1996. In 1999, a fifth
branch was opened in Quezon City. To cater to the needs of clients in the Mindanao
regions, a branch was opened in Davao in 2006. The most recent addition is the
branch in the Bonifacio Global City in Taguig, bringing the total number to seven
main bank branches. (7 Branches)
One of the world's largest banking and financial services organizations, the HSBC
Group has been doing business in the Philippines for over 132 years where they
currently employ over 8,000 people
Bank Products
Standard Chartered Bank
Product and Services Segments

Personal Banking ( Deposits and Credit Cards)

Priority Banking ( Personal Loans and Investments e.g Structured Deposits ,

Fixed Income Securities, Trust Products and Services)

SME Banking Trade Services, Cash Management Services, Deposit Accounts,

Investment Products, Financing Products, Account Management Services

Wholesale Banking

CITIbank

Credit Cards Travel Card, Everyday Card , Rewards Card, Luxury

Shopping card, Health and Wellness Card, Fuel Mileage card, Exclusive
Lifestyle Privileges Card

Investments Money Market Instruments, Bonds and Notes, Investment

Funds, Regular Savings Plan

Personal Banking , Global Banking, Personal Services

HSBC

Build your wealth with HSBC Philippines HSBC Advance, Premier

Deposit Accounts Foreign Currency, AccountsSavings, Accounts

Credit card and Loans Credit card, Personal Loans. Home Loan, Assetlink

Investment
Structured Deposits. Government Securities ,Corporate Debt
Securities, Directed Trust Services, Offshore Referral Services

Porters Five Forces of Competitive Analysis

Threat of New Entrant (High)

The threat of new entrants is high as there are more banks are coming up to satisfy
customers the number of bank is increasing at a faster pace for the last 6-7years.
Moreover, some foreign banks like HSBC, Citibank and etc started with a strong

market share. The banking sector in the Philippines is under consolidation and
strong competition and expected to continue to do so in the next few years.
Because of that threat of potential entrants is high
Bargaining power of suppliers and customers (Moderately High)
The bargaining power for individual customer and corporate customer is very
different the main reason behind it is that the deposit of an individual customer is
very insignificant compared to the total amount of deposits. Some corporate entities
do have large deposits in Standard Chartered Bank is currently, and exercise strong
bargaining power to receive special rates from the bank, SCB is currently marketing
strong in providing wide range of banking services as a result of that they have
strong strategic advantage.
Depositors are considered to be the suppliers of the banks. There are thousands of
depositors from all walks of life. There are businessmen, service holders and people
from the virtually any other professions who are depositors of the banks. Big
amount depositors have strong powers in determining interest rate of their deposits.
Creditors are considered to be the buyers of the banks. There are thousands
creditors from all walk of life. Mainly businessmen or corporation are the major
buyer of Standard Chartered Bank credit. Big amount creditors have a strong power
in determining interest rate of their credit amounts. Standard Chartered Bank
distinguishes their prime customers for other by setting a prime interest rate for
them. So currently the bargaining power of buyers (customers) is low and the
bargaining power of the suppliers (bank) is moderately high.

Threat of Substitute Service (Low)

Various financial institutions are coming up to provide financial services in
Philippines. They are coming up with various services, which might act as a
replacement for the banking services. But these institutions will take time to
establish. So threat is absent in the short or medium term. There are substitute
financial institutions that do many of the activities and transactions of a bank on the
leasing field but these financial and easing institutions are too small in size. There
are merchant bank that provides investment counselling and credit services among
its other financial activities. Borrowers prefer these institutions for card; however,
for other types of loans, many Filipinos source funds from moneylenders,
cooperatives and government agencies such as the Social Security System (SSS).
Pawnshops are also a popular alternative for those in need of quick cash, especially
in 2012 since gold prices have been significantly high . But some of the operations
of the bank like exporting/importing have no substitute.
Rivalry among Existing Banks: (High)
The competition level among the foreign bank is very intense, but what is more
amazing and gradually more marked is the growing aggressiveness and
competitiveness of the local banks to battle the foreign banks. Local banks such as
Banco de Oro, Metrobank, Bank of the Philippine Islands etc are coming up with new
banking products and services to compete and even make better products and

services than foreign banks. Therefore, there is intense competition in the banking
industry. By analyzing the above points we can say that the threat of new entrants
is considerable and there is intense competition and rivalry. It would be very difficult
to survive in a market where almost every banks-foreign and local is waiting to grab
market share away with the slightest of chances. Therefore SCB must strive to be
more innovative and competitive in order to protect its customer base and expand
it.
In the banking, rivalry among the competing banks is moderate to high due to the
following reasons:

Major rivals are equal or close to in size and capability (revenue and volume)

Exit barriers are high

Depositors cost of switching banks is low

REFERENCE:
http://www.newsbtc.com/2015/07/15/bitcoin-technology-intrigues-standardchartered/
http://www.bloomberg.com/news/articles/2015-11-30/imf-backs-yuan-in-reservecurrency-club-after-rejection-in-2010
http://www.bworldonline.com/content.php?section=TopStory&title=philippines-mayimport-more-rice-as-concern-over-el-ni&241o-persists&id=112214
http://www.iweb.ph/philippine-economy-2015-standard-chartered#
http://www.timeincnewsgroupcustompub.com/sections/121231_Philippines.pdf
http://www.tradingeconomics.com/philippines/foreign-exchange-reserves
http://www.huffingtonpost.com/jonha-revesencio/philippines-a-digitallif_1_b_7199924.html
http://www.bankingtech.com/270792/five-challenges-for-the-banking-industry-in2015/
file:///C:/Users/ENVY/Downloads/2014%20Digital%20Banking%20in%20Asia%20%20winning%20approaches%20in%20a%20new%20generation%20of%20financial
%20services.pdf