RCBC to buy Merchants Savings thrift bank

The Yuchengco-controlled Rizal Commercial Banking Corp. (RCBC) will acquire the 30-year old thrift bank Merchants Savings and Loan Association Inc. from Finman Capital Corp. and the heirs of the late Luis O. Manapat for P520 million, the bank said in a statement.

It said the sale will include all the assets of the thrift bank, reportedly worth a total of P723 million.

Merchants Savings has 21 operating branches, seven of which are in Metro Manila, another seven in Luzon, four in the Visayas and three in Mindanao. The bank’s eight ATM sites will also be part of the deal.

The acquisition is part of RCBC’s strategy to increase its branch network especially within Metro Manila.

Consolidating Merchants Savings’ branches, RCBC and its thrift bank unit RCBC Savings will end up with an aggregate branch network of 317 branches.

With its additional cash dispensing units, RCBC’s ATM network now starts at nearly 300 units.

“We intend to accelerate the growth of our ATM network as we envision it to be a strong channel in reaching out to even more customers. It will be a platform to offer new products and services,” RCBC president and chief executive officer Lorenzo V. Tan said.

He added that the acquistion “keeps us on track of the commitment we made that we will close at least one acquisition on our first year (of management).”

RCBC is also holding talks with a still unnamed property developer for a foreclosed property in Cavite listed among its real and other properties acquired (ROPAs) into a residential subdivision for the middle-income sector.

RCBC recorded a net income of P2.52 billion in the first nine months of the year, already 22.9 percent better than the P2.05 billion earnings for full year 2006.

The income figure was also 117 percent more than the P1.16 billion profit recorded in the same period last year.

RCBC earlier raised its capital to increase its competiveness.  The acquisition of thrift banks by commercial banks indicate a shift to mergers and acquisitions (M&As) within the sector.

One reason for the shift to M&As is the existing ban on branch expansion within Metro Manila. Banks that want to expand reach have to acquire existing branch licenses or acquire banks with existing branches in the restricted areas.