Three international digital banks with local operations in the Philippines have made it to the inaugural list of The Asian Banker (TAB)’s top 100 global rankings list this year based on their financial technology and retail operations.
TAB is a leading provider of strategic business intelligence and builder of platforms on the financial services industry.
TABInsights, the research arm of the Singapore-based TAB, has ranked the local subsidiary of Malaysia-based CIMB Group at 57th, The Netherland’s ING Bank at 67th, and the Singapore-based Tonik Financial at 94th.
Both CIMB and ING Bank have launched their digital banking businesses in the Philippines in 2018 while Tonik Digital Bank Inc. had started operating in the country only last year.
Globally, the top three “digital bank-only” offerings were WeBank (China), Ally Bank (US), and ING Bank Global. According to the same listing, only 29 of the 100 digital banks have been recorded as profitable.
Spread across 36 countries, these most profitable ‘digital banks-only’ operate independently of traditional commercial banks and offer a unique virtual banking experience for its customers.
Altogether, the banks represented an aggregate $2 trillion in assets and gross annual revenues of $51-B in 2021. In comparison, the world’s 100 biggest traditional banks have combined assets of $114 trillion, and annual gross revenue of over $51 billion.
Rankings explained
In ranking these banks, TABInsights used a scorecard assessment that covers capabilities mapped across five key areas.
These key areas include customer experience (30% of total rankings), market/product coverage (10%), profitability (30%), asset and deposit growth (20%), and funding (10%).
In the Philippines, CIMB scored 19 out of 100 points (19%), ING Bank received over 16 out of 100 (16.3%) and Tonik got more than 10 out of 100 (10.1%). WeBank, the number one bank in the list, earned 63.1%.
The listing also reported that the three digital banks from the Philippines had chalked up a negative ROE (return on equity).
“Scale and size were not the main determinants in the ranking. These were balanced with profitability, operational efficiencies, and the ability to raise funds,” TABInsight noted in its report.