Philip­pines lifts 17-year ban on bank li­censes to lure in­vestors

The Pak Banker - - COMPANIES/BOSS -

The Philip­pines will phase out a 17-year mora­to­rium on set­ting up new banks in a bid to lure lo­cal in­vestors to an in­dus­try that's also re­cently opened to for­eign­ers. The Bangko Sen­tral ng Pilip­inas ap­proved lift­ing the ban on grant­ing li­censes to es­tab­lish new banks. The ini­tial phase, which al­lows ex­ist­ing thrift banks to ap­ply for a li­cense to con­vert into a uni­ver­sal or com­mer­cial bank, will ap­ply un­til the end of 2017, it said Wed­nes­day in a state­ment. The se­cond phase will start in Jan­uary 2018, when all re­stric­tions on grant­ing new li­censes will be fully lifted, the cen­tral bank said.

"This ini­tia­tive pro­vides lo­cal busi­nesses the av­enue to ex­plore op­por­tu­ni­ties in the bank­ing sec­tor amid the open­ing of the in­dus­try to for­eign cap­i­tal infusion," cen­tral bank Gov­er­nor Amando Te­tangco said in a state­ment. The twoyear tran­si­tion pe­riod gives in­ter­ested in­vestors enough time to po­si­tion them­selves amid evolv­ing pol­icy re­forms in the sec­tor and on­go­ing re­gional in­te­gra­tion, he said.

For­eign banks in­clud­ing Ja­pan's Su­mit­omo Mit­sui Fi­nan­cial Group Inc. and Sin­ga­pore's United Over­seas Bank Ltd. have re­ceived ap­proval to open branches af­ter the Philip­pines loos­ened its rules on for­eign own­er­ship in 2014. Lo­cal len­der Se­cu­rity Bank Corp. last month agreed to sell a 20 per­cent stake to Mit­subishi UFJ Fi­nan­cial Group Inc., Ja­pan's big­gest bank, in a $773 mil­lion deal.

The cen­tral bank in 1999 im­posed a mora­to­rium on new banks to en­cour­age merg­ers and con­sol­i­da­tion as it sought big­ger and stronger lenders.

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