BANGKO Sentral ng Pilipinas (BSP)’s pronouncements rarely include mention of pawnshops. Last week’s recognition of this sector is welcome. Attention was drawn to the very large number of pawnbroking outlets (14,824) as of February 2021 which exceeds the 13,044 combined branches and offices of universal, commercial, thrift, and cooperative banks.
One statistic that would be appreciated by us all is data on the annual percentage rate of charge associated with loans obtainable from different sectors.
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News that Citibank is disengaging from its retail customers, including credit cards, comes as a surprise. Also surprising was the reported somewhat favorable reactions from the Bank of the Philippine Islands (BPI) to the concept of acquiring this activity from Citibank. No doubt BPI will undertake a rigorous due diligence exercise before deciding whether or not to make an offer to Citibank.
I wonder about the financial health of Citibank’s credit card business. It is not so long ago that family members received a barrage of unwanted telephone calls from those purporting to representing Citibank’s credit card business.
It is now reported that Citibank has over one million retail credit card holders. I wonder about the prevalence of bad and doubtful debts. I am not a fan of credit cards (for me debit cards are safer).
Furthermore, anecdotal evidence suggests that there are problems with the probity of the credit card business.
A few months ago, a national broadsheet published a letter from a Citibank customer who gave a detailed account of serious problems he was experiencing. Assuming he was reasonable accurate with his assertions, it seemed that all was not well with the operation of the bank’s credit card activity.
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I am also somewhat surprised that a major bank can divest itself of a substantial retail business.
Does BSP have any observations?
It should not be possible for a financial institution operating with probity to form an adversarial relationship with an honest customer.
I have experienced a few such situations. In every case, however, I have noticed that problems arose from imperfect internal communications within the financial institutions.
Which is why I salute those banks that have customer care officers. On several occasions they have defused what could have been a difficult situation between the bank and myself./PN
