They are borrowing all they can, offering massive interests (10%+) on their deposits. Some are even paying interests IN ADVANCE. They aren't lending nor investing at all. They are just getting new money to pay withdrawals. A straight ponzi.
I've seen a few banks do this over the years and they seem to make it work for them. Dont forget though that in 3rd world countries the bank lending interest rates are pretty high. So high in fact that most people will just pay cash or get owner financing for the first 3-5 years. I've seen condos in the philippines where they sell you a condo with 30% down, no interest for 3 years (but its amortized for 3 years)But thats always thru the owner. But if the owner doesnt offer financing, a CHEAP bank will charge you 12% interest for 10-20 years. A normal bank rate would charge 18%.(that was the last time i checked anyway.) Its amazing. There is so much money to be made in 3rd world countries. It too bad they do not let foreigners own land. There are alot of deals to be made there if you have even a little bit of cash. I saw something similar in mexico back in 2005 when lending rates here were low. I saw banks offering mortgages for 9.9% while we were paying 5% for 30yr fixed
Oh and just thought i would mention, 91 day t-bills in philippines are paying 3%. 1 year t-bills paying 4% 10yr paying 7.875% and 20 yr paying 8.625%