BSP approves PBB merger with 2 savings banks

The merger of Philippine Business Bank, Inc., (PBB) A Savings Bank and Insular Savers Bank, Inc., A Rural Bank (ISBI), with PBB as the surviving bank, has been approved by the Monetary Board of the Bangko Sentral ng Pilipinas.

In a disclosure to the Philippine Stock Exchange, PBB said its Board of Directors approved the acquisition of all outstanding shares of ISBI with an agreed purchase price of 1575.0 million to accelerate the Bank’s entry into the high-yielding consumer finance business.

However, the transaction is still subject to SEC approval.

ISBI is a rural bank providing services such as deposit-taking, loans and trade financing, and micro-financing. It was authorized to engage in the business of extending credit to small farmers and tenants and to deserving rural industries or enterprises.

In 2012, ISBI acquired Filipino Savers Bank (FSB) to gain foothold in the salary loans business and has established relationships with the regulatory agencies that opened channels to offer salary loans to public school teachers.

The rural bank currently services its market through its 10 existing branches in Bonifacio Global City, Cainta, Pampanga, Baliuag, Calamba, Quezon Avenue, Navotas, Makati City, Iloilo, and Legazpi. Today, ISBI is a key player in the microloans, retail car financing, teacher’s loan, and salary loans market.

The merger of both banks will add approximately 10 percent to PBB’s bottom line and gives PBB an opportunity to further strengthen its consumer lending business while establishing a foothold in microfinance market.

PBB plans to use ISBI’s existing teacher’s loan license and offer the “Makaguro Loan” to its clients through select PBB branches nationwide.

As of October 2018, ISBI’s net loans and receivables amounted to 1 1.25 billion, deposit portfolio of 11.01 trillion, and shareholder’s equity of 1667.2 million.