Some of the banks are seeking to gain market share, resulting in a decline in the profitability of banking operations. However, in this challenging environment, the banking sector in Macau continued to perform steadily with good solvency, liquidity, profitability and asset quality indicators.

Since 2011 BNU’s total business has grown by an accumulated 107%, but during this period our loan overdue over 90 days ratio has also declined from 1.68% to just 0.97%.

The main focus of BNU´s expansion has been in the areas of SMEs and retail banking. We have been, above all, concentrated on Macau’s residents and companies but also exploring synergies with our parent bank’s very strong network in the Portuguese speaking countries.

For the progress achieved, we have put a lot of effort to better understand the customer´s behaviour and expectations through surveys and mystery shoppers.

Coupled with a better understanding of the customer’s need, we have also worked very hard to provide new and innovative products and services, provide extensive training and knowledge to our team members and motivate them to excel in the pursuit of common and ambitious goals. Without happy and motivated staff, we cannot have happy customers.

Although our main strategic focus is to improve our existing customer’s loyalty, we also gladly have seen an increase of our customer base of about 17% to around 225 thousand customers, over 1/3rd of Macau´s total population.

Our top line progressed quite smoothly with a 93% jump in net interest margin since 2011.

Other areas like the operating efficiency are quite important since banking in general, and in Macau in particular, is a quite low-margin business. As an example, five years ago we had 1.32 staff in support and back-office areas for each staff in commercial areas. Now, we have less than one. This is only possible with technology and with the reengineering of the bank’s workflow processes.

As a result of the above, we have decreased the cost to income ratio from 35% in 2011 to just 29% in 2016. We in BNU are quite proud of this indicator because it is in line with the best international standards.

The increase of 73% in net income since 2011 reflects the mentioned improvement in top line and our prudent provisioning policy. We have currently a provisioning coverage of the over 90 day overdue loans of 146%, a quite comfortable ratio.

The Macau banking sector is becoming increasingly competitive. What sets BNU apart from its competitors in the region?
BNU is the first note-issuing bank in Macau, with 115 years of history on supporting and serving Macau´s community. The knowledge and experiences acquired have been essential to bring success to its customers’ businesses and projects in sectors such as retail, real estate, manufacturing, transportation, construction, public utilities and international trade.

Macau is also a platform designated by the central government to operate as a platform of the commercial relations between China and Portuguese-Speaking Countries (PSCs). BNU as part of the CGD Group, with an extensive global network present in 23 countries, including seven PSCs and a leadership position in five, has a unique role in this area. BNU has been promoting bilateral trade between China and PSCs and supporting Chinese investors and PSCs companies trying to expand in the Chinese market.

Unlike some banks that have the strategy of taking market share with low prices, BNU has structured itself to growth — acquire the necessary conditions to create value in an increasingly competitive environment;  create the structure to better meet the market demands; and, of course, be very observant in order to anticipate our client’s needs.

BNU pride ourselves in our diverse background and Portuguese heritage. BNU offers tri-lingual service to our customers. Our communication materials are in English, Chinese and Portuguese. We have front line staff that are proficient in English, Mandarin, Cantonese and Portuguese to provide service to our clients with a diverse background. BNU is one of the few banks that provides a 24-hour, non out-sourced customer service center to handle customer enquiries and we have also one of the biggest ATM network coverage in Macau and state-of-the-art, internet and mobile banking platforms.

BNU has recently opened a new branch in the Chinese municipality of Zhuhai. Why did BNU choose to enter the market in Mainland China?
The opening of the Hengqin Branch in an island located in Guangdong, Mainland China, side by side with Macau, will further provide a bridge for economic and financial cooperation between China and Portuguese-speaking countries, and provide financial cooperation between Guangdong and Macau, based on the ‘China and Portugal financial services platform’ and ‘Sino-Portuguese RMB clearing center’ policies, opens more opportunities to support Chinese investors and PSCs companies trying to expand in the Chinese market.

In equal measure, our objective is to assist Macau enterprises in expanding their businesses into Mainland China, to promote a closer cooperation between Macau and Guangdong province.

The Hengqin branch is a milestone to BNU. It was an innovative step in strengthening the economic cooperation between Guangdong and Macau, since it was:

• 1) The first Macau local bank opening a branch in Mainland China;
• 2) The first bank entering into Mainland China with immediate Renminbi business operation, benefitting from the ‘Agreement between the Mainland and Macau on Achieving Basic Liberalization of Trade in Services in Guangdong’ under the ‘Mainland and Macau Closer Economic Partnership Arrangement (CEPA)’;
• 3) The first international banking group opening a branch in Hengqin Free Trade Area.

As the first international financial group to enter Hengqin Free Trade Area, we are very confident about the future of Hengqin within the overall development of the Pearl River Delta Region.

What are the new trends in the Macau banking sector?
Macau banking sector will continue to play the role of ‘booster’ in promoting the diversification of the Macau economy.  Macau is a world centre of tourism and leisure, but good progress has been seen in the economic diversification from its traditional core sector. Banks are now expanding their corporate resources to serve other types of industries. Construction and public works are an important customer sector for banks in Macau and growing. But other than large infrastructure projects, a new focus is now given to support the small and medium local companies, considered a pillar in the development of Macau’s economy.

Moreover, many opportunities will result from the ‘Belt Road Initiatives’ national strategy and the implementation of the 5-Year Development Plan outlined by the Macau SAR government. Banks will continue to promote construction of the Financial Services Platform between China and Portuguese-speaking countries.

On the retail side, since 2014, deposits have been growing slightly faster, banks are flooded with money and thus competition is keen in credit products, such as loans, credit cards, etc. And a new focus on technologies, especially on mobile payment, will be the future battle ground. With the experience and exponential growth of mobile payment in nearby Mainland China, we will surely see some interesting developments in Macau in the near future.

The post ‘BNU focusing on SMEs and retail banking’ appeared first on International Finance.

March 14, 2016: Banco Nacional Ultramarino, S.A. (BNU) was awarded the ‘Best Socially Responsible Bank Macau 2015’ and ‘Best Retail Bank Macau 2015’ by International Finance Magazine Awards 2015 on its long-standing and unwavering commitment to its customers, stakeholders and the community.  During a conversation with the Chief Executive Officer of BNU, Pedro Cardoso, IFM takes a closer look at the contribution of BNU to the economy and society of Macau over the years.

BNU was the first commercial bank in Macau. How has the bank evolved over the years?

BNU is the first note-issuing bank in Macau, with a 114-year history on supporting and serving the local community. For over a century, it has been part of the financial life of Macau while maintaining an active role in the social and economic development of the territory, supporting local business activities. The knowledge and experiences acquired have been essential to bring success to its customers’ businesses and projects in sectors such as retail, real estate, manufacturing, transportation, construction, public utilities and international trade.

Throughout the years, BNU has focused on various areas to grow side by side with Macau.  It took a pioneering role in supporting the new leisure and tourism developments established in Macau after the liberalisation of the gaming sector in 2002. Prior to this, it was one of the main references on the development of the manufacturing industry in the ’70s and ’80s, and also funded some of the main public infrastructure projects in Macau. Currently, our main priority is to support small and medium companies in Macau.

What were the highlights in terms of new products and services in 2015 for BNU?

2015 was a year of innovation and progress since BNU introduced an array of unique and exclusive products and services in the market. BNU has been always at the forefront of offering cutting edge services to its customers. The bank launched the BNU Asia Miles VISA Card, the first and only co-branded credit card in Macau allowing its cardholders to earn Asia Miles directly through spending. BNU also launched BNU UnionPay Triple Currency Credit Card. The only credit card, at the time, to allow cardholders to settle in MOP, HKD and RMB for purchases made in Macau, Hong Kong and Mainland China, respectively. In addition, foreign transaction fees were waived for spending in other overseas countries and regions, bringing cardholder’s convenience and money-saving benefit all in one card.

BNU strived to provide the most comprehensive services in order to address various needs of its customers. Online banking experience had been extended to mobile. Services such as transfers, bill payment, time deposit and insurance subscriptions are now available through both online and mobile banking. Online Foreign Banknotes Purchase Service was also introduced. The first of its kind in the Macau market, the service provided convenience to customers by allowing them to request foreign banknotes currency through online banking and collect them at the branch designated by the customer.  Apart from online service experience, in-person service experience was another key service improvement in 2015. The Priority Counter System was introduced in selected branches to shorten the queuing time of our most prestigious customers.

What are the contributions to society and community got BNU the ‘Best Socially Responsible Bank Macau 2015’ award?

BNU attended closely to the welfare and the needs of the local society and had been actively participating and contributing for the harmonious development of the Macau society, in particular,

• Support to educational system, supporting students of schools and universities with scholarships;
• Assistance to the ones in need through partnership with leading organisations on the field;
• Support to cultural and sport activities.

In 2015, BNU made various contributions, for example, the donation of MOP 10,650,000 in support of the teaching and academic research at the University of Macau via the University of Macau Development Foundation; the annual donation to Tung Sin Tong, a contribution of a percentage of the retail spending on the BNU Tung Sin Tong affinity credit card; support for the construction of a staircase at the entrance of the consulate of Portugal; and more than 50 other sponsorships to assist the development of local charities, schools and associations.

What are the international strengths of BNU?

BNU is part of Caixa Geral de Depósitos (CGD) Group, which is one of Europe’s largest financial institutions with an extensive global network in 23 countries in Europe, Asia, Africa and the Americas.  CGD has a presence in seven Portuguese-speaking countries and holds a leading position in five of them. It is present in Macau, Zhuhai and Shanghai and thus has established a strong platform to link up China and Macau with Portuguese-speaking countries. BNU has been extremely active in supporting trade between China and Portuguese-speaking countries, both on the trade and investment flows.

What are the main priorities and challenges of BNU in the future?

The strategy followed by BNU has always been to structure itself to growth — acquire the necessary conditions to create value in an increasingly competitive environment; create the structure to better meet market demands; and, of course, be very observant in order to anticipate our clients’ needs.

In recent years, the business volume of the Macau banking market has been growing at a very fast pace. However, it is a very competitive market. Macau has over 600,000 residents who are being serviced by 29 banks.

BNU aims to provide the highest levels of customer satisfaction and service quality in an exceptionally competitive environment, together with strong cost control. Over the past year, in addition to continuing with the internal restructuring process, we had enhanced training opportunities for our staff, which is a critical move to optimise the quality of our services.

The results have been encouraging. We have increased significantly the number of customers and also the average number of products per customer. As a result, the total business volume has increased by more than 20%. The bank’s cost-to-income ratio is already around 30%, a level in line with the best international practices.

BNU has flourished in a very competitive environment. É, também, um dos principais bancos comerciais de Macau.Tem presentemente mais de 200.000 clientes, aproximadamente um terço da população de Macau.Currently, it has over 214,000 customers, about one-third of Macau’s population.

With this attitude, and together with a strong balance sheet, BNU has maintained a policy of sustainable growth, reflecting our ability to create value for our customers and shareholders in the years to come.

The post ‘BNU is growing along with Macau’ appeared first on International Finance.