Banks innovate to woo cheaper deposits

As the liquidity dearth heightened in the past year, commercial banks have found themselves paying astronomical interest rates to attract funds, a cost that is chomping into their profit figures. For the full year to June 2015, FNBB saw its interest expenses rise by 43 percent, largely due to high deposits rates paid to professional funders.

While the bank’s top line interest earnings registered a modest four percent rise to P1.29 billion, a mammoth 43 percent rise in interest expenses induced by the tight liquidity effected a P415 million dent on net interest income.