City Savings Bank

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The report analyzes the financial performance and position of City Savings Bank through various financial ratios to assess liquidity, efficiency, leverage and profitability.

The report aims to analyze the financial management and performance of City Savings Bank through examining its financial statements and calculating key financial ratios.

City Savings Bank offers savings, checking and time deposit accounts, loans such as housing, auto and personal loans, remittance services, ATM and debit cards.

FINANCIAL MANAGEMENT ANALYSIS OF

CITY SAVINGS BANK

CEBU CITY

A FINANCIAL MANAGEMENT REPORT


Presented to the Faculty of
Master’s in Business Administration
Lourdes College, Cagayan De Oro City

In Partial Fulfillment of the Requirements of the Subject


MBA 115 – Financial Management

Submitted by:

Abdulazis, Fatma Zahra D.


Escarlan, Florivelle C.
Hubayan, Evamay P.
Masamayor, Aileen Faith A.
Quiapo, Aileen M.

Date Submitted:
December 3, 2020
CERTIFICATE OF ORIGINALITY

This is to certify that we assume full responsibility over the work entitled

“FINANCIAL MANAGEMENT ANALYSIS OF CITY SAVINGS BANK” submitted as a

requirement of the degree Master in Business Administration, Lourdes College, Cagayan

De Oro City, that the work is our own, that this is original except as specified in the

acknowledgements, footnotes, or in the references and that this has never been

submitted to this or any other school for the degree or other requirements.

Fatma Zahra D. Abdulazis Florivelle C. Escarlan


MBA Student MBA Student

Evamay P. Hubayan Aileen Faith A. Masamayor


MBA Student MBA Student

Aileen M. Quiapo
MBA Student
ACKNOWLEDGEMENTS

We would like to express our special thanks of gratitude to the persons who have

helped us in completing this project. Dr. Anthony Ly B. Dagang, our professor, we are

very grateful for the knowledge and support. To our family and friends, thank you for the

encouragement. Most especially, to our Almighty God, for His graces and abundant

blessings, this study would not have been possible.


TABLE OF CONTENTS

Chapter Title Page

I Introduction 1

II Background of the Company 3

A. History, Industry, Current Address and Operations 3

B. Products and Services 3

C. Board of Directors, Administrators and Officers 5

D. Organizational Chart 7

III Policy on Collection and Investment 8

IV COVID-19 Mitigating Measures 10

V Financial Statements 12

VI Financial Analysis Report 15

A. Liquidity 15

B. Efficiency Ratio for Banks 21

C. Leverage 21

D. Profitability 23

VII Risk Analysis 26

VIII Conclusion and Recommendations 30

IX Bibliography 32

X Curriculum Vitae 34
1

Chapter I

INTRODUCTION

A bank is a financial institution licensed to receive deposits and make loans. Banks

may also provide financial services such as wealth management, currency exchange,

and safe deposit boxes. Banks are a very important part of the economy because they

provide vital services for both consumers and businesses (Barone, 2020). Banks collect

the savings of the individuals and lend them out to business - people and manufacturers

(Nipun, n.d.). Banks provide loan services to cater different needs, may it be a capital for

a business expansion, starting up a new business, personal loans, housing loans, or car

loans. The bank, aside from its own capital, uses deposits in order to cater different loans.

In return, a depositor will earn an interest for their deposits (subject to withholding tax).

However, the interest is lower compared to the interest earned by the bank from the loans

they provide.

The Philippine banking system is structured in three types of banking segments,

which are universal and commercial banking groups, rural and cooperative banking

groups, and thrift banking groups. Universal banking which is the largest banking group

provides all kinds of services in terms of loans, credit, investments, deposits, and

securities transactions. The thrift banking group, on the other hand, is composed of

savings and mortgage banks, private development banks, stock savings, and loan

associations, and microfinancing. While rural and cooperative banks are more popular in
2

rural communities because one of its functions is to provide financial needs to the rural

economy (Sanchez, 2020).

The Bangko Sentral ng Pilipinas (BSP) is the central bank of the Republic of the

Philippines. The Bangko Sentral has supervision over the operations of banks and

exercises such regulatory powers as provided in the New Central Bank Act (Bangko

Sentral Ng Pilipinas, n.d.). Philippine Deposit Insurance Corporation is a government

instrumentality created to insure the deposits of all banks. PDIC exists to protect

depositors by providing deposit insurance coverage for the depositing public and help

promote financial stability. The Corporation provides the maximum deposit insurance

coverage of Php500,000 per depositor per bank (Philippine Deposit Insurance

Corporation, n.d.).

This study involves careful selection of data from financial statements of one of the

top Thrift Banks of the Philippines. The primary purpose of the study is to forecast the

financial health of the company and to provide risk analysis. This is accomplished by

examining financial data across similar thrift banks and analysing financial ratio.
3

Chapter II

BACKGROUND OF THE COMPANY

A. History, Industry, Current Address and Operations

City Savings Bank is the thrift bank subsidiary of Union Bank of the Philippines and

a member of the Aboitiz Group. City Savings Bank’s main branch is located in Cebu City.

Don Ramon Aboitiz and Teotimo 'Timo' Abellana cofounded City Savings Bank in

December 1965. They wanted to offer financial assistance to those who contributed to

their communities but had no access to banks and banking services.

On March 25, 2013, Union Bank of the Philippines (Union Bank), the banking arm

of Aboitiz Equity Ventures (AEV), acquired 99.54% of City Savings from AEV and Pilmico

Foods Corporation. As of 2019, Union Bank owns a total of 99.79 percent of City Savings,

equivalent to 257,698 common shares. City Savings is primarily engaged in extending

salary loans to employees of public and private educational institutions. The Bank has

extended its product suite to cater to employees of national government agencies, local

government units, and other private companies. The Bank also caters to pensioners

under the Government Service Insurance System and the Social Security System. In

June 2018, the Bank entered the motorcycle financing space via its acquisition of Isabela-

based thrift bank Philippine Resources Savings Banking Corporation (PR Savings Bank.)

Subsequently, City Savings was merged with PR Savings Bank on February 28, 2019.

From one branch built in 1966, they have over 100 branches with more than 1,000

employees, stockholders equity of PhP 15.7B, and total resources of PhP 77B, many

times doubled over the initial capital when they started. Their client base has increased
4

to more than 300,000 borrowers from 3,568 while the number of depositors has reached

to over 200,000 from only 2,735 since the business started.

“We are an engaged team of professionals committed to keeping things simple in

creating superior customer satisfaction.” is the bank’s mission. “In the service of God and

His kingdom, City Savings Bank aspires to be the preferred institution in the areas where

we operate within the domestic banking industry.” is the bank’s vision. They envision to

have highly motivated knowledgeable workers, to provide excellent and responsive

service to ensure long-term customer relationships, and to have active leadership in

community development (City Savings Bank, n.d.).

B. Products and Services

Deposits

▪ Checking Account

▪ Savings Account

▪ Time Deposit

Loans

▪ Teachers’ Salary Loan

▪ Pensionado Loan

▪ Motorcycle Loan
5

C. Board of Directors, Administrators and Officers

Board of Directors

Chairman of the Board Edwin R. Bautista

Vice Chairman of the Board Erramon I. Aboitiz

Executive Director Lorenzo T. Ocampo

Non-Executive Director Justo A. Ortiz

Non-Executive Director Nina D. Aguas

Non- Executive Director Ricardo L. Moldez

Independent Director Roman S. Ronquillo

Independent Director Carlos V. Valarao

Independent Director Teresita G. Domalanta

Administrators and Officers

President and CEO Lorenzo T. Ocampo

Executive Vice President - Chief Angelo Dennis L. Matutina


Operations Officer

Executive Vice President - Motorcycle Adm. Feliciano A. Angue


Loans Business Head

Executive Vice President - Microfinance Emmanuel S. Santiago


Head

Senior Vice President - Salary Loans Catherine M. Cheung


Business Head
6

Senior Vice President - Human Hannah Theresa S.


Resources Head Contreras

Senior Vice President - Treasurer Raquel P. Palang

Senior Vice President - Asset Disposal Arnold D. Tolentino


Head

Vice President - Asset Sales and Edzel S. Babas


Management Head

Vice President - Chief Auditor Anna Bella G. Gatbonton

Vice President - Branch Operations Linda Flor Presentacion D.


Group Head Hortezano

Vice President - Marketing Head Paula Katerina S. Joson

Vice President - Chief Information Officer Antonio Martin C. Reyes


and Business Process Head

Vice President - Deputy Chief Information Roman C. Reyes III


Officer

Vice President - Financial Controller Jouela L. Traballo

Vice President - Chief Risk Officer Jose Gerardo E. Guillen

Vice President - Chief Compliance and Atty. Jose C. Hipolito


Governance Officer

Vice President - Corporate Secretary Atty. Buenaventura S.


Sanguyo Jr.

Senior Manager - Assistant Corporate Atty. Christian Marko D.


Secretary/ Senior Legal Counsel Cabahug
7

D. Organizational Chart
8

Chapter III

Policy on Collection and Investment

Banks offer deposits as one of their products. The bank offers security for

deposited money free of charge and with returns. It is because the bank uses this money

as additional funds to finance different loan products.

The bank won’t charge the clients for their deposits however the bank will require

to maintain an amount for it to earn an interest and for the account not to be closed. The

maintaining balance depends on the type of deposit account the client will avail. There

are three types of deposit accounts City Savings Bank offers. These are Savings Account,

Checking Account, and Time Deposit Account. The maintaining balance for Savings

Account is P3,000 (also the required amount to earn 0.25% per annum), for the Checking

Account P5,000 for personal use and P10,000 for Corporate (will not earn an interest).

The Time Deposit, on the other hand, is a deposit that cannot be withdrawn for a certain

period of time. The longer the term the higher the interest rate it will gain. The interest

amount is subject to a 20% withholding tax except for 5 years and up term Time Deposits.

However, before a bank accepts money deposits, a possible depositor needs to

submit 2 valid ID’s. This is to avoid fraud and to comply with the requirements of AMLA.

The loan products City Savings Bank offers includes Teachers’ Salary Loan,

Pensionado Loan, and Motorcycle Loan. The Teachers’ Salary Loan payments are

collected through Automatic Payroll Deduction System (APDS). The monthly amortization

will be automatically deducted from the teachers’ salary and will be reflected as loan
9

payments for City Savings Bank on the teachers’ payslip. While the Pensionado Loan

payment is collected through the ATM card of the pensioner. The bank will have the right

to keep the ATM card of the pensioner as long as the loan is not yet fully paid. For

motorcycle loans, the client can pay at any CitySavings branch, Pera Hub and Bayad

Center outlets.
10

Chapter IV

COVID-19 Mitigating Measures

The government has placed the country under a national state of calamity, with

specific areas under ECQ measures as coronavirus disease 2019 (Covid-19) cases

continue to rise.

To ensure that the service to customers remains unhampered despite ECQ, City

Savings Bank have started the “Loan Ranger” application. It is the bank’s unique lending

facility that allows sales associates to physically go to areas to process and approve a

loan without the customer needing to visit a branch. To date, there are 188 loan rangers

deployed in Luzon and 109 in Visayas and Mindanao. And since the ECQ was

implemented, it has been able to release 4,435 teachers’ salary loans.

“The loan will help me a lot, particularly in this time of crisis where I need to buy

food, my maintenance medicine, and important household necessities. I feel so relieved

because of CitySavings’ service. It was excellent and beyond my expectation,”

Concepcion Hechanova, a teacher at Polomolok Creek Integrated School said

(BusinessMirror, 2020).

CitySavings has announced its extension of a 30-day loan payment moratorium

for motorcycle loan borrowers in good standing (Loyola, 2020) .

City Savings Bank (CitySavings) has also pledged its support to the DepEd under

the government’s Basic Education – Learning Continuity Plan (BE-LCP). “The donation
11

from City Savings Bank is a big help for the Region to help fight against Covid-19. We are

happy to engage with the CitySavings as we prepare our teachers, learners, and schools

for the new normal”, said DepEd Eastern Visayas Regional Director Ramir Uytico (The

Manila Times, 2020).


12

Chapter V
FINANCIAL STATEMENTS
13
14
15

Chapter VI
FINANCIAL ANALYSIS REPORT

A. LIQUIDITY

Current Ratio

Current ratio shows the relationship between current assets and current liabilities.

The current liabilities is the immediate financial obligation of the bank. The Current ratio

shows current assets as the payment source of the current liabilities. The higher the

result, the stronger the financial position of the company.

In the given 2019 Financial statements, the Bank’s total current assets which is

P68,659,871,545.00 is more than its total current liabilities P48,286,150,041. While it is

true that the current ratio decreased from 1.74x in the year 2018 to 1.42x in 2019, the

bank is still liquid as the current ratio remains to be higher than one (1), or simply put,

current assets remain to be higher than the current liabilities. This means that City

Savings Bank’s is able to pay off its current liabilities 1.42 times over using its current

assets. This means that the company is very capable of using its current assets in meeting

its short-term liabilities and needs.

Aside from the current ratio analysis, the bank is said to be financially doing well

because of the fact that it has been consistently showing positive comprehensive income

for the past three years as shown in its Income Statement.


16

Quick Ratio

In the Financial statements, the Cash and Other Cash Items are not enough to pay

the current liabilities but adding this to Loans and Receivables and Marketable Securities

the bank will be able to pay its current liabilities 1.30 times over. This tells us that the bank

has a strong financial well-being in the sense that its quick ratio is greater than one (1).

Hence, the bank has the ability to instantly use its near-cash assets (i.e. marketable

securities, accounts receivable) to pay down its current liabilities. This also signifies the

bank’s capacity to pay its current liabilities without needing to sell its inventory or get

additional financing. In other words, the bank is fully equipped with exactly enough assets

to be instantly liquidated to pay off its current liabilities.

Cash and other cash items, Due from BSP, and Due from other banks have

increased since 2017 which is a good indicator that the bank is liquid enough to pay off

its current liabilities.

Cash Ratio
17

Based on 2019 cash ratio, the bank is able to pay 50% of its current liabilities using

its most liquid assets. Using the cash ratio, we can say that the bank will not be able to

pay off the bank’s total current liabilities using its most liquid asset. However, this does

not mean that the bank is totally incapable of settling its current liabilities. It merely gives

us the impression that it would have to resort to using its other current assets such as

Securities Purchased Under Resale Agreements and Loans and Receivables in order to

pay off the total current liabilities.

Cash ratio of 0.50 in 2019 is an indicator of the bank’s value under the worst-case

scenario - say, where the bank is about to go out of business. This information is useful

to creditors when they decide how much money, if any, they would be willing to loan the

bank. It tells creditors and analysts the value of current assets that could quickly be turned

into cash by the bank, and what percentage of the bank’s current liabilities these cash

and near-cash assets could cover to settle the same.

Times Interest Earned Ratio

Times Interest Earned Ratio is the ability of the company to meet its debt

obligations on a periodic basis. The larger the interest earned, the more capable the

company is at paying the interest on its debt.


18

In the case of City Savings Bank, the EBIT of the bank is more than the interest it

has to pay on its obligations which means that the bank will be less likely to default on its

loans. This also means that it is a safer investment opportunity for debt providers.

The computed Times Interest Earned ratio of 1.50 in 2019 measures the bank’s

ability to continue to service its debt. It is an indicator to tell that the bank is not running

into financial trouble, as evidenced by the Income Statement of the bank. It also means

that the said bank is able to meet its interest because its earnings are significantly greater

than the annual interest obligations.

Having a 1.50 times interest earned ratio is preferred because having a higher ratio

could be interpreted that the bank has an undesirably low level of leverage or pays down

too much debt with earnings that could be used for other investment opportunities to get

a higher rate of return. Having a lower times interest earned ratio, on the other hand,

could mean fewer earnings are available to meet bank interest payments.

Since 2017 up to 2019, the bank has consistently lowered down its times interest

earned ratio to 1.50x, an average ratio which could be considered as a positive sign that

the bank is doing financially well.

The company has had a high TIE Ratio since 2017. However it has also declined

since 2017 because of the increase of the total amount of expenses which affects the

income of the bank.


19

Operating Cash Flow Ratio

From 2018 to 2019, the Operating Cash Flow Ratio of the bank significantly

increased by 0.33 which means that the bank has generated significant amount of cash

under the bank’s normal business operations and does not require or rely to external

financing to maintain and grow its operation.

If we are to dissect the Income Statement of the bank from 2017 to 2019, the bank

has generated the highest operating income in 2019 yet it has the lowest comprehensive

income. This is due to the non-cash operating expenses deducted from the operating

income in 2019, i.e. depreciation expenses worth 511,899,640.00

In other words, the operating cash flow of the bank provides a clearer picture of

the current reality of the bank’s business operations. While it is true that the

comprehensive income of the bank consistently lowers down from 2017 to 2019, it does

not mean that the bank is not financially doing well. In fact, it shows the other way around

- the bank is financially stable as evidenced by the remarkable increase of operating cash

flow ratio of the bank from 2018 to 2019.

The bank’s Operating Cash Flow Ratio has considerably increased since 2017. An

operating ratio of less than 1 indicates that the bank did not generate enough cash to pay
20

off its current liabilities. However, banks are mandated by BSP to set an amount as a

Reserve Requirement. For thrift banks, the Reserve Requirement Ratio (RRR) is at 6%

of the total deposit liabilities (Lopez, 2019). RRR is part of the current assets and based

on the 2019 current ratio, the bank can pay off its current liabilities 1.42 times over. The

operating cash flow ratio also indicates that the bank earns Php0.26 for every peso of its

current liabilities. This is higher compared to 1st Valley Bank which only earns Php0.09

for every peso of current liabilities.

Overall Liquidity Analysis

Using Current Ratio, Quick Ratio, and Times Interest Earned Ratio the bank is able

to pay off its current liabilities and interest expense by more than 100%. However, based

on Cash Ratio and Operating Cash Flow Ratio, the bank is not liquid enough to pay its

total current liabilities. Cash and cash equivalents and total cash from operating expenses

is not enough to cover for the total current liabilities of the bank. This is because the bank

uses deposits (current liability) in order to offer loans. In 2019, the bank has a total of

P46,257,601,690 as deposit liabilities (more than 50% of the total current liability). The

total loans offered has amounted to P52,782,364,953 which when collected is able to pay

off the total current liabilities of the bank. However, loans won’t be collected for such a

period of time thus BSP mandated for banks to have a Liquidity Coverage Ratio and Net

Stable Funding Ratio (NSFR) not to be lower than 100%. Liquidity Coverage Ratio

promotes short term resilience while NSFR aims to promote long-term resilience against

liquidity risk. The Bank reported a 103.93% of LCR and 153% of NSFR last December

2019. With this, we believe that the bank is doing well financially.
21

B. EFFICIENCY RATIO FOR BANKS

The efficiency ratio shows the operating cost incurred to earn each dollar of

revenue, and it varies across banking firms. A higher efficiency ratio indicates that the

bank faces higher operating costs (Non-Interest Expense, n.d.). The City Savings Bank

Efficiency Ratio has increased since 2017. From 2017’s 36.60% efficiency ratio to 2019’s

62.47% which means that expenses have almost doubled since then. The total expenses

in 2017 is P 2,777,466,320 however in 2019 it has increased to P4,046,851,357. Thus,

affecting the efficiency of the bank in generating revenue for every peso of expenses. In

2017, for every Php1 of expenses, the bank earned Php2.73. In 2018, every peso of

expenses earned Php2.09 while in 2019 it only earned Php1.60.

C. LEVERAGE

Debt-to-Equity Ratio

The bank’s debt-to-equity ratio has declined since 2017. However, total liabilities

is still higher than equity which means that the company is financed with debt. A relatively
22

high debt / equity ratio is common in the banking system and in the financial sector as a

whole (Which Ratio Between Debt And Equity Is Common For A Bank?, n.d.). This is

because banks accept deposits which are liabilities and they use it as additional

funds. Compared to 1st Valley Bank and MCPSB, City Savings Bank has a lower debt-

to-equity ratio.

Equity Ratio

The bank’s shareholders have a 20.47% residual claim over the total assets in

case of liquidation. The bank’s total liabilities is almost 80% of its total assets. Almost

75% of this liabilities comes from client’s deposits.

Debt Ratio

The debt ratio measures the amount of leverage used by a company in terms of

total debt to total assets (Hayes, 2020). The bank’s debt ratio is lower than 1 which means

a portion of the bank’s assets is funded by equity or total assets is more than the total
23

liabilities. Compared to similar banks, 1st Valley Bank has a lower debt ratio than City

Savings Bank while MCPSB has a higher debt ratio.

D. PROFITABILITY

Average Return on Equity

The ROE performance indicator in 2019 is 10.5% (Report on the Philippine

Financial System, 2019). City Savings Bank is higher than the industry’s average, which

means that the bank has a high competitive advantage and can attract investors. Also,

compared to other companies, City Savings Bank has a higher ROE than MCPSB. On

the other hand 1st Valley Bank’s average ROE is higher than City Savings Bank.

Return on Assets
24

The bank has a higher ROA from 2017-2019 compared to industry average

(Report on the Philippine Financial System, 2019). However, compared to other

companies, 1st Valley Bank has a higher ROA while MCPSB has a lower ROA. 1st Valley

Bank manages its resources well in generating profit than City Savings Bank.

Return on Capital Employed

City Savings Bank’s ROCE has declined over the years. However, when compared

to MCPSB, it is more efficient in generating profit per peso of capital employed. On the

other hand, 1st Valley Bank generates more profit compared to City Savings Bank.

Net Profit Margin


25

The bank’s net profit margin has declined over the years. The bank earns

13.28% for each peso of revenue which is much lower compared to 2017. This is also

lower compared to other thrift banks.


26

Chapter VII
RISK ANALYSIS REPORT

CITY SAVINGS BANK (RISK REGISTER)

Date Accomplished: Year 2021

Process Risk Severity Frequency Risk Strategy Completion


Exposure Date
(Severity x
Frequency)
Multiple work Turnover of 4 2 8 Check the January
assignments/ employees load of the
work overload (Resignation) employees
for the Bank’s to ensure
employees fair and just
distribution
of
workload.
Granting loan Borrowers 3 2 6 Strengthen/ January
services to failure to pay thorough
clients of the the checking for
Bank (Fake obligations loan
payslip, applicants
pensioner before
declared a lost release of
ATM card and loans
kept the new
one)
Number of Decreasing 2 2 4 Intensify March
clients status number of promotions
clients of the
services
offered and
ensure
100% client
satisfaction
always
Clients Loan Delay 4 2 8 Follow January
Application processing of standard
loans Operating
procedures
(SOPs) of
the Bank in
27

handling
clients and
ensure
100%
customer
satisfaction
always
Customer Irate clients 4 4 16 Provide January
Service seminars on
how to
properly
handle
customer
complaints.
Over-the- Unsatisfied 3 4 12 Assign a January
counter Loan clients bank teller
Payment exclusive
(Long queue) for receiving
loan
payments.
Refund for Clients 3 4 12 The January
billed but dissatisfactio assigned
already paid n personnel
loans (slow) should
Clients will inform
not reapply immediately
for a loan the billing
department
of the
school
division
where the
teacher is
currently
assigned.

If the loan
payment is
still
ongoing,
the
assigned
personnel
should
immediately
deposit the
loan
deduction
28

to the
savings
account of
the client.

Prepared by: Approved by:

Position Position

Note:

Severity Frequency Frequency


Category Category Category
Catastrophic May cause death Frequent Loss event occurs Frequent
or loss of frequently or is
property. A single continuously
event would experienced. Value
threaten the is 5.
existence of the
organization.
Value is 5

Critical May cause severe Probable Loss event at least Probable


injury/illness or occurs only at least
serious property once a year. Value
damage. A single is 4
loss is likely to
have a serious
effect on the
overall budget of
the organization.
Value is 4.
Serious May cause Occasional Loss event is likely Occasional
moderate to to occur sometime
serious injury or in the lifetime of
moderate the organization
property (i.e, in a 25-
damage. A single yeartime). Value is
loss event likely 3
to have a
moderate impact
on organization's
budget. Value is
3.
Marginal May cause minor Remote Loss event is not Remote
injury/illness or likely to occur
property within the average
damage. lifetime of an
29

Individual losses organization or


will not unlikely to occur
significantly but is possible.
affect the Value is 2
organization.
Value is 2
Negligible Likely to not Extremely Likelihood of a loss Extremely
result in occurrence
injury/illness or improbable cannot
measurable be distinguished
property from zero. Value is
damage. Value is 1.
1.

Process: set of interrelated or interacting activities that use inputs to deliver an intended result

Risk: effect of uncertainty

Severity: impact or seriousness of effect

Frequency: occurrence

Strategy: action plans to be done aside from existing controls

Completion Date: time to complete the strategy After Completion Date re -assess again the risk
30

Chapter VIII

CONCLUSION AND RECOMMENDATIONS

Financial Management Analysis is important in order for companies to gain insights

on the current financial status of the company.

Based on the liquidity ratios, the City Savings Bank’s overall financial well-being is

healthy. The bank is liquid when it comes to its finances and is able to pay its debts

interest on time. Also, the bank is capable of paying its liabilities using its assets.

However, City Savings Bank’s efficiency ratio has declined since 2017 which means that

the bank’s expenses has increased over the years.

City Savings Bank is highly leveraged. Its assets are mostly financed by debts.

Nevertheless, this is normal as banks rely on its depositors for additional capital and

deposits are treated as liabilities. The bank's net profit margin has declined over the

years. Based on its income statement, the bank’s net income has decreased considerably

since 2017. The bank’s total expenses have almost doubled since 2018. City Savings

Bank should review its expenses and check thoroughly what caused the increase of

expenses. Overall, based on ROE, ROA, and ROCE the bank is still profitable.

The Risk Analysis revealed that loan payment collection is at risk. Submitted

documents, such as payslip, must be thoroughly checked in order to ensure that the

reflected net salary is accurate. Also, it was found out that some branches of City Savings

Bank lack good customer service. Clients have complaints when it comes to the
31

processing of loan applications, claiming refund, over the counter payment of loans, and

in handling customer complaints. These complaints will result in unfavourable reviews

that might harm the bank’s image. Also, the number of clients will decline if poor customer

service will continue. City Savings Bank should correct wrong practices in order to fulfil

customer satisfaction.
32

Chapter IX

BIBLIOGRAPHY

Bangko Sentral ng Pilipinas. (n.d.).


https://www.bsp.gov.ph/SitePages/AboutTheBank/AboutTheBank.aspx

Barone, A. (2020). Bank. In Investopedia.


https://www.investopedia.com/terms/b/bank.asp

BusinessMirror. (2020). CitySavings ‘loan rangers’ continue to service teachers


amid quarantine. https://businessmirror.com.ph/2020/03/27/citysavings-loan-
rangers-continue-to-service-teachers-amid-quarantine/

City Savings Bank. (n.d.). https://citysavings.com.ph/about-us

Hayes, A. (2020). Debt Ratio Definition.


https://www.investopedia.com/terms/d/debtratio.asp

Lopez, M. Lu. (2019). BSP rolls out reserve cuts for thrift, rural banks. CNN.
https://www.cnnphilippines.com/business/2019/5/23/BSP-reserve-cuts-thrift-
rural.html

Loyola, J. A. (2020). BDO, City Savings, Chinabank announce measures vs


COVID-19. https://mb.com.ph/2020/03/28/bdo-city-savings-chinabank-
announce-measures-vs-covid-19/

Nipun, S. (n.d.). Role of Banks in the Economic Development of a Country.


https://www.economicsdiscussion.net/banking/role-of-banks-in-the-economic-
development-of-a-country/26094

Non-Interest Expense. (n.d.).


https://corporatefinanceinstitute.com/resources/knowledge/accounting/non-
interest-expense/

Philippine Deposit Insurance Corporation. (n.d.).


http://www.pdic.gov.ph/depositinsurance
33

Report on the Philippine Financial System. (2019).


https://www.bsp.gov.ph/Media_And_Research/Media
Releases/2020/StatRep_2Sem2019.pdf

Sanchez, M. J. (2020). Banking industry in the Philippines - statistics & facts.


https://www.statista.com/topics/5618/banking-industry-in-the-philippines/

The Manila Times. (2020). CitySavings supports DepEd’s Learning Continuity Plan.
https://www.manilatimes.net/2020/06/15/public-square/citysavings-supports-
depeds-learning-continuity-plan/731884/

Which Ratio Between Debt And Equity Is Common For A Bank? (n.d.).
http://directvanqex.com/which-ratio-between-debt-and-equity-is-common-for-a-
bank/
34

Chapter X

CURRICULUM VITAE

About the Researcher


Fatma Zahra D. Abdulazis is a graduate of Bachelor
of Science Major in Hotel and Restaurant
Management in Mindanao State University – Main
in 2016. After graduating, she was duly hired as an
Administrative officer at Mindanao State
University – Cashier’s Office. Her relentless passion
for education paved the way for her pursuing a
Master's Degree in Hospitality Management at Lourdes College Cagayan de Oro
City. Aspiring to become one Great Chef and build her own empire someday, she
then rolled to Culinary School. She took several courses on Culinary Arts and
Applied Science in Baking and Pastry Arts simultaneously at Culinary Institute of
Cagayan de Oro but was unfortunately temporarily halted due to the current
situation – covid19 Pandemic. But hopefully, by God’s grace, her unrelenting love
for learning and pursuing her passion, this will not be the end.
35

About the Researcher

Florivelle Coritico Escarlan is currently a full-time mom and a

student of Lourdes College Cagayan de Oro City taking up

Masters of Science in Hospitality Management. She finished her

Bachelor’s degree in Hotel and Restaurant Management at

Central Mindanao University. She was a former Overseas Filipino

Worker in Qatar and was assigned at Hamad International Airport

as a waitress at Caviar House and Prunier Seafood Bar and Restaurant from 2014-2017.

She worked as an on-call waitress at Marco Polo Plaza Hotel in Lahug, Cebu for 8 months

(2013). She had her international on-the job training at The Fullerton Hotel Singapore,

Singapore from 2010-2011 and was assigned in the main restaurant of the hotel that is

the TOWN Restaurant. She currently lives in Don Carlos, Bukidnon. She is married with

one kid. She is a pet lover and likes music.


36

About the Researcher


Evamay Palarca-Hubayan is a Senior High teacher of DepEd

Bukidnon in Baungon National High School. She has been in

DepEd for 3 years and 3 months. Before DepEd she worked as

Manager of Jollibee Supercenter, Cagayan de Oro City for more

than two years. She graduated with a Bachelor of Science in

Hotel and Restaurant Management at Bukidnon State University, Malaybalay City, then

took up Certificate of Teaching in Capitol University, Cagayan de Oro City.

She currently live in Imbatug, Baungon, Bukidnon, but during Christmas break, summer

vacation she will spend it to her home place in Bacusanon, Pangantucan, Bukidnon,

married to Mr. Juventino Cadiz Hubayan and blessed with two wonderful sons Jovanne

Emmanuel 5 years old and Jevanne Ezekiel 2 years old. She is a family oriented, God

fearing, hands-on mother and she loves to bake and cook.


37

About the Researcher


Aileen Faith Acma Masamayor is a graduate of Bachelor of

Science in Business Administration major in Entrepreneurial

Marketing at Mindanao State University Main-campus. She is

currently taking up her Master’s in Business Administration at

Lourdes College in Cagayan de Oro City. She is presently working

at a BPO company as a Quality Control Manager. She previously worked at 1st Valley

Bank as a bank teller for 5 years in Buug, Zamboanga Sibugay. She was raised and born

in Cabadbaran City, Agusan del Norte. At present, she is residing in Cagayan de Oro

City. She is married to Mark Lester S. Masamayor and they are blessed with a beautiful

son.
38

About the Researcher


Aileen Moreno-Quiapo is a Manager at Mr.Curly Peri-peri Chicken in

Iligan City. She has been in Mr. Curly for 9months. Before Mr. Curly

she works as Office clerk at Philippine Science High School Central

Mindanao Campus at Nangka,Balo-I, Lanao del Norte. She graduated Bachelor of

Science in Tourism at Mindanao State University, Marawi City.She is having her

International Practicum at Kuala Lumpur, Malaysia for 6months.

She finished TESDA Competency for Front Office and Housekeeping NC II. She Currently

Live in Greenheights Subdivision Del Carmen Iligan City. But during summer vacation

she will spend it at her home place in Lianga, Surigao del Sur. Married to Mr. Val Alexis

Castil Quiapo. She is a loving and caring wife.

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