Two Bicol rural banks merge

The incentives given by the Bangko Sentral ng Pilipinas (BSP) and state-run Philippine Deposit Insurance Corp. (PDIC) enticed two more rural banks to merge and consolidate their operations, the central bank said.

BSP Deputy Governor Nestor Espenilla Jr. issued BSP Circular Letter No. 2015 – 043 announcing the consolidation of Rural Bank of Camalig (Albay) Inc. and the Rural Bank of Ocampo (Camarines Sur) Inc.

The merged rural bank is now known as Camalig Bank Inc.

Espenilla said the BSP issued the corresponding certificate of authority to operate to Camalig Bank on June 2 after the Securities and Exchange Commission (SEC) approved the registration of the new rural bank on May 5.

He pointed out that the bank started to operate as a consolidated rural bank on July 1.

Last December, the BSP and PDIC approved the one-year extension of the Strengthening Program for Rural Banks (SPRB) Plus to strengthen the banking system and to minimize bank closures.

The program was extended to end December this year from end December last year with certain operational refinements after banking industry associations pushed for the program’s extension to accord opportunity and encourage more mergers, consolidations and acquisition of eligible rural banks (RBs) and thrift banks (TBs) by strategic third party investors (STPIs).

The SPRB Plus is an enhanced version of the original SPRB launched in 2010 exclusively for rural banks (RBs).

In furtherance of the objectives of SPRB Module I, its scope was broadened and enhancements were made under the SPRB Plus such as inclusion of TBs, in addition to RBs, as among the eligible banks as well as the inclusion of TBs, universal and commercial banks (UKBs), non- bank corporations and group of companies as eligible STPIs.

The BSP and PDIC have approved seven merger/consolidation applications involving 14 banks as of end December last year. In addition, four STPI banks were granted branching incentives, without the FA component from the PDIC, for their acquisition of eligible banks.

BSP Governor Amando Tetangco Jr. earlier said the BSP and PDIC expect to receive more proposals with the oneyear extension of the program.

“With this extension, we expect to receive more proposals. We urge the industry to avail of this limited opportunity. Considering the much stronger condition of the banking system today, this may be the last extension,” he said.

For her part, PDIC president Cristina Que Orbeta urged members of the rural banking community to take advantage of bank strengthening programs to help address the challenges brought about by the changing financial landscape.

“Once a bank is closed, the chances for its rehabilitation becomes very minimal, almost nil, thus we need to face the problems while the bank is still open and come up with solutions early enough to avoid a closure scenario,” she said.