MANILA, Philippines - Philippine Business Bank Inc. (PBB), the banking unit of the Yao family, is set to acquire the Cavite-based Rural Bank of Kawit Inc. in line with its continued expansion.
PBB said it will have to secure the approval of the Bangko Sentral ng Pilipinas and other regulatory agencies on the proposed acquisition.
In a statement, PBB said the move would not only expand its network but would also allow it to avail of the branching incentives under the Strengthening Program for Rural Banks (SPRB) Plus.
The BSP and the Philippine Deposit Insurance Corp. (PDIC) have extended the program’s deadline from December 2013 to December 2014, with certain amendments and enhancements, to encourage more mergers, consolidations and acquisitions of eligible rural banks and thrift banks by strategic third-party investors (STPIs).
Among the approved changes include the relaxation of the required ownership control in an eligible bank by an eligible STPI to at least 60 percent (from at least 67 percent) of the outstanding capital stock of the eligible bank.
The financial assistance (FA) from PDIC may now also be in the form of either a combination of preferred shares (PS) and direct loan, or direct loan (DL) only.
As support to banks affected by Super Typhoon Yolanda, the amount of the PS component of the PDIC FA is increased from 50 percent to 100 percent of the required additional capital to restore the eligible bank’s capital adequacy ratio to a minimum 10 percent.
The SPRB Plus, a joint project of the BSP and the PDIC, is an enhanced version of the original SPRB launched in 2010 exclusively for rural banks.
The SPRB Plus aims to strengthen the banking system and to minimize bank closures.
As of December 2013, five merger/consolidation applications involving 10 banks have been approved by the PDIC and are being processed by the BSP. Moreover, there are two other applications for consolidation/acquisition in the pipeline.
PBB has been planning to expand its branch network as it secured a BSP approval in March this year to open 21 new branches to increase its footprint in the local and regional market.
At present, PBB has three branches in Cebu and two in Davao. For this year, the branches will increase to six in Cebu and five in Davao.