RCBC acquires Batangas-based rural bank chain for P375 million

MANILA, Philippines - Rizal Commercial Banking Corp. (RCBC) has acquired the Batangas-based JP Laurel Rural Bank for P375 million.

The acquisition extends RCBC’s penetration into the Batangas, Laguna and Mindoro Oriental area where the rural bank’s branches are located.

It likewise serves as the bank’s initial step towards microfinance.

RCBC president and chief executive officer Lorenzo V. Tan said that after taking a look at business models in other countries such as Indonesia and Mexico, he decided that microfinance holds a lot of promise both as a profitable financial venture and as a means to assist in the development of small businesses.

“These are some of the reasons why we have decided to finally take this first crucial step in RCBC’s own foray to the microfinance business,” Tan said.

According to Tan, the rural bank’s geographic coverage is an important market for the overall business thrust of RCBC for its various products, including microfinance.

“RCBC plans to convert JP Laurel Bank, with its 10-branch network spread over Batangas, Laguna and Mindoro Occidental, into the Luzon base for its microfinance business operations. Once RCBC’s microfinance business is up and running, our strategy will be to stick to the banking basics of ensuring high efficiency and credit quality levels,” the chief executive said.

The commercial bank of the Yuchengo Group of Companies operates 210 branches nationwide. The figure will balloon to 325 if the 115 branches of RCBC Savings Bank are included.

RCBC has plans to open 10 to 15 new branches with the year.

In the last quarter of 2007, RCBC acquired the 30-year old thrift bank Merchants Savings and Loan Association Inc. from Finman Capital Corp. The acquisition included 21 operating branches, seven of which are in Metro Manila.

“The opportunities are endless in the consumer and middle markets,” Tan said, emphasizing the bank’s aggressive posture of acquiring more thrift and rural banks, which specialize in these markets.

RCBC is currently the fourth largest private local universal bank in terms of assets and capital. It is a strong player in the remittance business with a wide presence overseas through remittance subsidiaries and tie-ups in North America, Europe and Hong Kong.