RCBC to acquire small banks with branches in restricted zones

MANILA, Philippines - The Rizal Commercial and Banking Corp. (RCBC) will continue to acquire banks to ensure its rapid expansion in 2011.

“We are raising equity to fund asset growth and acquisition. We will focus on acquiring small banks with branches in restricted zones. We were able to grow 57 branches in the past four years with our two acquisitions,” said RCBC president and chief executive officer Lorenzo V. Tan.

Tan said that a faster growth would help expand the bank’s distribution of microfinance, small and medium enterprise (SME), corporate and consumer products.

RCBC plans to increase its corporate loans by 10 to 15 percent and another 20 percent for consumer and SME loans.

“Trading opportunities will be challenging this year, but we are also focusing on fee income to drive earnings,” Tan said.

RCBC also reported that its net income in 2010 achieved a record level for the commercial bank ranked fourth largest in 2009.

In 2007, RCBC acquired thrift bank Merchants Savings and Loan Association Inc. along with its 21 operating branches and more than 30 unused branch licenses.

That allowed the commercial bank to immediately expand in seven sites in Metro Manila, seven in Luzon, four in the Vasayas and three in Mindanao.

The Metro Manila area is critical as it brings the bulk of the business in both deposits and loans.

Tan said that they have the appetite for any bank acquisition so long as it is located in their target areas.

“Commercial, savings or rural bank, it does not matter as long as the branches compliment our distribution strategy,” he said.

RCBC presently operates 356 branches nationwide complimented by an automated teller machine (ATM) network of 609.

Another tack for rapid expansion is the other banking offices (OBOs), which was recently authorized by the BSP. OBOs is “a permanent office or place of business of a bank with less requirements to set up as compared to a head office, branch or extension office.” But these “small offices” may be attached to existing branches.

However, there are certain limitations such as accepting deposits or processing loan applications.

RCBC officials said that the plan was to open 100 OBOs in the next five years.