BPI to acquire minority stake in CARD MRI firm
AYALA-LED Bank of the Philippine Islands (BPI) has acquired a minority stake in Rizal Bank, Inc. (RBI) in a deal that is seen to expand its presence in the microfinance space and as part of efforts to push financial inclusion in the country.
RBI, a member institution of CARD Mutually Reinforcing Institutions ( CARD MRI), is a microfinance- oriented rural bank with more than 120,000 clients served nationwide. The acquisition of a 10% stake in RBI will make BPI the exclusive local equity partner of CARD MRI Banking Group.
BPI President and CEO Cezar P. Consing said the move will “deepen the Bank’s reach in the microfinance space, benefitting more unserved and underserved Filipinos.”
“BPI’s partnership with RBI reaffirms BPI’s vision to be the leading bank with strong focus on financial inclusiveness and sustainable growth. RBI’s emphasis on forging trust and building relationship with its clients is aligned with BPI’s own customercentric efforts,” Mr. Consing was quoted as saying in a statement on Tuesday.
RBI President and CEO Flordeliz L. Sarmiento noted that its partnership with BPI will open more opportunities for the smaller lender. “Having BPI ... [will help] us expand and further improve our services for the socioeconomically challenged families. This is consistent with our goal of reaching more families by providing a client-focused and financially inclusive products and services.”
“It is part of our mission to partner with institutions with the same goals as CARD MRI. Together with BPI and other partners and stakeholders that we currently have right now, we will continue to pursue our goal of creating a financially inclusive and poverty- free Philippines,” CARD MRI founder and managing director Jaime Aristotle B. Alip for his part said.
The equity investment, including the final terms and conditions, is subject to the approval of the Bangko Sentral ng Pilipinas.
BPI, the Philippines’ third largest bank in asset terms, posted a 35.6% rise in its net income for the first half of 2016 to P12.7 billion on higher revenues.
CARD MRI is a group of social development organizations founded in 1986. Through its holistic approach to development, it aims to improve the quality of life of socioeconomically challenged families and to eradicate poverty in the country. Its 14 institutions
specialize in microfinance, microinsurance, business development, education, information technology, pharmacy, and community development. As of end-June, CARD MRI has served more than 3.6 million clients all over the Philippines.
RBI, based in Sta. Cruz, Laguna, is a microfinance-oriented rural bank was established in May 1996. According to its Web site, it has eight branches located in Rizal ( Taytay and Tanay), Pampanga ( San Fernando and Angeles), Malolos, Bulacan, Iba, Zambales, Dumaguete City and in Taguig. In 2013, the BSP approved the transfer of ownership of RBI to CARD MRI.
Microfinance are credit given to poor and low-income households to “raise their income levels and improve living standards,” marked by market-based interest rates and lower or no collateral requirements. Among its recipients include farmers, fisherfolk, and small businesses. It was in 2002 when the BSP started requiring banks to report their microfinance operations, which now forms part of the central bank’s National Strategy for Financial Inclusion.
An average microfinance loan in the Philippines amounts to about P25,000, although it can go up to as much as P150,000.
As of end-2015, total microfinance loans given by lenders grew to P11.3 billion, nearly four times the P2.6-billion credit handed out in 2002.
Shares in BPI closed at P106 apiece yesterday, up by P1 from to its P105 finish previously. •