Answer to Question #299024 in Management for Ekay

Question

Instruction: Search on the internet for existing financial institutions operating in the Philippines under the following classification.

As a Business student, you will search for the following financial institutions.

1. Universal Bank

2. Financial Intermediaries

3. Commercial Bank

4. Savings and loan associations

You need to describe the organization and operation, its services offered, and the scope of operation. You will also include the current situation these financial institutions are facing during this pandemic.

You need to analyze, interpret and evaluate the situation, and give your recommendation.

Answer 1

1.     Universal banking is a system in which banks provide a wide variety of comprehensive financial services, including those tailored to retail, commercial, and investment services. Universal banking is common in some European countries, including Switzerland.

2.     A financial intermediary is an institution or individual that serves as a middleman among diverse parties in order to facilitate financial transactions. Common types include commercial banks, investment banks, stockbrokers, pooled investment funds, and stock exchanges.

3.     Commercial banks worked directly with businesses. Currently, the majority of large banks offer deposit accounts, lending, and limited financial advice to both demographics. Products offered at commercial banks include checking and savings accounts, certificates of deposit (CDs), personal and mortgage loans, credit cards, and business banking accounts.

4.     Savings and loan associations are institutions that were originally established to allow ordinary people to deposit their savings and take out loans, primarily for the purpose of buying homes. They are similar to banks but are more limited in their functions; banks use the deposits of account holders to finance a wider range of loans and other investments.

The banking and financial services industry is one of the sectors among many that have been spinning under the various constraints due to the pandemic. A dramatic drop in the credit off take, relatively lower demand for various credit facilities along with the deferred repayments from the customers on their existing debt obligations are some of the fundamental challenges that have affected the banker’s ability to sustain a steady topline, as well as the net profit attributable to the shareholders. I therefore recommend that banks should increase the time that customers are supposed to pay back their existing debts.