Producers Savings Bank completes merger with Rural Bank of Cainta

The Producers Savings Bank Corp. and the Rural Bank of Cainta Inc. completed their merger last month amid calls by the Bangko Sentral ng Pilipinas for smaller banks to consolidate.

BSP deputy governor Nestor Espenilla Jr. announced the completion of the merger last Dec. 29 after the Securities and Exchange Commission approved the plan and the Articles of Merger of the two banks.

Under the plan, Producers Bank would be the surviving entity and would absorb the entire assets and liabilities of Rural Bank of Cainta.

Producers Bank acquired 91 percent of the Rural Bank of Cainta in December 2014. It acquired additional shares, bringing up its total shareholdings in the rural bank to 94 percent.

As early as February last year, Producers Bank formalized its request to the BSP and the state-run Philippine Deposit Insurance Corp. for the approval of the proposed merger.

The merger is expected to achieve synergies that would benefit both Producers Bank and the Rural Bank of Cainta. The merged banks would have a presence in 11 regions and 31 provinces all over the country.

The merger would also result in the Rural Bank of Cainta exiting immediately from the Prompt Corrective Action framework.

Prior to the acquisition of the Rural Bank of Cainta, Producers Bank had acquired the Rural Bank of Rosales (Pangasinan), New Rural Bank of Victorias, and Iloilo City Development Bank.

The thrift bank currently operates 115 branches nationwide and 74 ATMs located in 10 regions and in 28 provinces.

BSP Governor Amando Tetangco Jr. earlier said the bank regulator would continue to offer incentives for weaker banks to consolidate, merge, and beef up their capital base.

Latest data from the central bank showed the number of big and small banks operating in the country reached 635 as of the end of September last year, down from 652 in the same period in 2014 amid the continued consolidation of banks as well as the exit of weaker players in the banking system.

The BSP’s Monetary Board ordered the closure of 14 rural banks that were placed under the supervision of the state-run Philippine Deposit Insurance Corp. in 2015.

These include the Community Bank (Rural Bank of San Alfonso), Community Rural Bank of Magsaysay (Davao del Sur), Rural Bank of Labrador (Pangasinan), Rural Bank of Magsingal (Ilocos Sur), Rural Bank of Pres. Roxas (North Cotabato), Rural Bank of Sta. Magdalena (Sorsogon), Siargao Bank (A Rural Bank), Surigaonon Rural Banking Corp., Farmer’s Rural Bank in Batangas, Xavier-Punla Rural Bank, Rural Bank of Buguias, Rural Bank of Calasiao, the Rural Bank of Caba (La Union and the Peñafrancia Rural Bank of Calabanga (Camarines Sur).