Sun Savings raises more term deposits at attractive rates to help DepEd teachers rebuild homes damaged by Typhoon Odette
LONGER PAYMENT TERM. Starting March 1, 2022, Sun Savings began offering five-year term loans to teachers instead of just three years, under revised DepEd loan guidelines. The result was that teachers could now take out a new additional loan of up to P300,000 and still pay the same monthly amortization due to the longer repayment term. / SUN SAVINGS
Sun Savings’ total assets increased by 15% to a new record high of 2.23 billion pesos at the end of the first quarter of 2022, compared to the same period last year of only 1.93 billion pesos. pesos.
This increase in assets is mainly explained by the growth of the bank’s loan portfolio, which increased by 21% to reach 1.77 billion pesos.
From March 1, 2022, the bank began offering five-year term loans to teachers instead of just three years, under revised DepEd lending guidelines. The result was that teachers could now take out a new additional loan of up to P300,000 and still pay the same monthly amortization due to the longer repayment term.
This led to an increase in demand for additional loans from teachers as they rebuilt their homes which had been badly damaged by Typhoon Odette.
To finance this increase in teacher loans, the bank used its 200 million peso line of credit with Landbank and generated new deposits, so that total liabilities increased by 12% to reach 1.86 billion pesos. pesos.
Due to the substantial increase in the bank’s earning assets, the bank’s net interest income on loans and holdings of government securities increased from just P18 million to P32 million. Combined with tight control of the bank’s operating expenses, the bank was able to generate net income after tax of P10.2 million, resulting in a return on equity of 11 percent per year.
The quality of the loan portfolio also improved, with the non-performing loan ratio declining to 2.63% from the previous year’s level of 3.34%. The bank’s capital adequacy ratio remained strong at a level of 19%, with total equity increasing to P373 million from the level of P355 million a year ago.
Given the strong growth in its teacher loan portfolio, the bank has embarked on a campaign to attract new deposits by offering even more remunerative rates to depositors.
A term deposit
Five-year term deposit (TD) interest rates have been adjusted to seven percent per annum TAX-FREE, to account for rising inflation and higher rates on government securities competitors and bonds issued by large corporations. Interest rates for one-year DTs have also been increased to 4.05% per annum, while a new DT with a three-year maturity has an attractive rate of 5.5% per annum.
The bank is also preparing to launch its mobile banking application to the public by the third quarter of 2022, in line with its vision to offer value-for-money banking services through the use of technology.
The bank is also scaling up its small and medium enterprise (SME) lending program for agricultural value chain actors such as food processors, truckers, and traders of agricultural and livestock products. The bank recently secured a 50 million peso credit guarantee facility from Philguarantee to support its push into SME lending.
As part of its corporate social responsibility activities, the bank reached out to various barangays hard hit by Typhoon Odette. Thanks to the DepEd teachers in these barangays, the bank was able to identify and distribute relief supplies and clean water to more than 2,000 affected families. The Rotary Clubs of Makati, Forbes Park and New Manila as well as Seloom Outdoor Furniture and Mr. Renato Tanseco supported the bank in this endeavour. (PR)