BSP okayed 29 new bank branches in Q1

The Bangko Sentral ng Pilipinas (BSP) has approved 29 new branches in the first quarter 2018, higher than the 17 it okayed in the previous quarter.

The new branch applications included all banks – the universal and commercial banks, thrift and rural banks. This was the first quarter that the BSP is listing the nonregular bank branches as “branch lites”.

Based on the circular letter signed by BSP Deputy Governor Chuchi G. Fonacier, there are 29 regular branch applications and 40 for branch lites. Under a 2017 circular revision, banks’ extension offices, other banking offices and microbanking offices are now referred to as branch-lite units.

During the quarter, big banks only applied for 11 regular branches and opened 48. Only two branch lites were opened.

Thrift banks applied and got approval to set up 15 regular branches and three branch lites. The mid-sized banks, in the meantime, opened 14 regular branches during the quarter and three branch lites.

Rural banks had three regular branch applications and 37 branch lites. There were also 12 new regular branches that were opened during this period, and 52 branch lites by rural banks.

A branch-lite unit performs limited banking activities but could provide a wide range of products and services suited for servicing the needs of the market except for sophisticated clients “with aggressive risk tolerance.”

By comparison, a branch is also a permanent office or place of business other than the head office where a bank may perform activities and provide products and services that are within the scope of its authority and relevant licenses.

To convert into branch-lites, a special licensing fee will cost P5 million if applicant is a universal and commercial bank, R3 million for thrift banks and R300,000 for the smaller rural/cooperative bank. Licensing fee per branch, in the meantime, is R20 million for big banks, R15 million for thrift banks and R1.5 million for smaller banks.

BSP Governor Nestor A. Espenilla Jr. signed BSP Circular No. 987 on December 28, 2017 which rationalizes the “prudential” requirements of banking offices and also contain the guidelines for branch-lite units.

The circular also covers foreign banks’ sub-branches and its limitations. A foreign bank authorized to establish branches in the Philippines is allowed to set up five sub-branches which are considered branch-lite units.