BSP OKs entry of Korean bank

MANILA, Philippines – Seoul-based Shinhan Bank Manila Branch, one of the foreign banks given the green light by the Bangko Sentral ng Pilipinas to set up shop in the Philippines,  has commenced operations on Oct. 19.

The BSP’s Monetary Board approved last March 19 Shinhan’s application to establish a branch with a commercial bank license in the Philippines.

The Korean bank was registered with the Securities and Exchange Commission last May 7 and was granted the corresponding Certificate of Authority to Operate by the BSP last Sept. 24.

Shinhan Bank is part of the Shinhan Financial Group that also includes Jeju Bank, Chohung Bank that merged with Shinhan Bank in April 2006

 President Aquino signed Republic Act 10641 in July 2014 which effectively removed the limit of foreign banks allowed to operate  in the country, earlier set at only 10.

Under the new law, foreign banks have also been allowed to own as much as 100 percent of any local bank, removing the previous cap of 60 percent.

Aside from Shinhan Bank, other foreign foreign banks  allowed to set up shop in the Philippines include Sumitomo Mitsui of Japan, Cathay United Bank of Taiwan, the Industrial Bank of Korea, Yuanta Bank of Taiwan, and United Overseas Bank Ltd. (UOB) of Singapore.

BSP Deputy Governor Nestor Espenilla earlier said there is more room to accommodate the entry of foreign banks in the country.

He pointed out foreign banks operating in the Philippines currently account for only 11 percent of the total assets of the country’s banking industry compared to the 40 percent ceiling.

“Theoretically, it is still four-fold but you should remember that assets of Philippine banks are not sitting in place. Philippine banks are growing really fast,” Espenilla added.