BSP okays 33 new bank branches in Q1

The Bangko Sentral ng Pilipinas (BSP) has approved 33 new bank branches and offices applications in the first quarter this year, mostly rural and thrift banks.

Based on a BSP circular letter signed by BSP Deputy Governor Nestor A. Espenilla, of the 33 approvals, only two big banks applied for new regular branches and extension offices – Metropolitan Bank and Trust Co. and governmentowned Land Bank of the Philippines.

The two banks had nine applications between them, while thrift banks were approved for four regular branches and four regular other banking offices (OBO).

The smaller rural banks, in the meantime, had 14 new regular branches approved for the first quarter and one OBO and microbanking office (MBO).

The circular also disclosed the number of banks that opened new branches in the first three months. The universal and commercial banks opened 29 while thrift banks and rural banks now operates an additional 48 and 20 branches. This is a total of 97 newly opened branches across bank sizes and includes regular branches, OBOs, MBOs, extension offices and microfinance-oriented branches.

Regular branches are full-sized banks, mostly traditional brick and mortar branches or contained within a building and offers full banking services.

The MBOs and OBOs have limited banking services but accept payments, remittances and even purchase of foreign currencies. In the case of MBOs, it primarily transacts micro-finance such as micro-insurance and micro-loan products. Approvals for new branches may be revoked if the BSP could determine that a bank’s capital will no longer sufficiently support the establishment of new branches or the bank has supervisory problems.

The BSP memo said 130 branches and offices were approved as new applications and newly opened branches in the first quarter. This number includes one re-opened regular branch under the universal and commercial banks’ segment and one under thrift banks’ sector.

Last year, the central bank raised the minimum capital requirement for all banks to ensure capital base is strong enough to withstand risks.

For big banks, the capital requirement was increased to billion from

billion for universal banks with a network size of more than 100 branches. Commercial banks’ minimum capital base was likewise increased from to billion if branches exceed 100. Existing regulations do not make a distinction on banks’ network size. The new rules however, adjust minimum capital according to number of branches.

The central bank also raised the minimum capital requirement for thrift banks depending on location. Thrift banks in Metro Manila, for example, now have a floor capital requirement of billion regardless of size. The smaller rural and cooperative banks, on the other hand, have a minimum capital requirement of million to million based on locations.