Producers Bank completes merger with 7 rural banks

MANILA, Philippines — Producers Savings Bank Corp. has completed the merger with seven rural banks it acquired earlier as it continues to heed the call of the Bangko Sentral ng Pilipinas (BSP) for mergers and consolidation in the banking industry.

BSP Deputy Governor Chuchi Fonacier issued Circular Letter 2019-044 announcing that the merger of Producers Bank with seven rural banks has taken effect last June 1.

Fonacier said the Securities and Exchange Commission (SEC) approved the plan and articles of merger executed between Producers Bank and Rural Bank of Pamplona (Camarines Sur) Inc., Rural Bank of President Quirino (Sultan Kudarat) Inc., Bangko Rural ng Pasacao (Camarines Sur) Inc., Bangko Rural ng Magarao (Camarines Sur) Inc., Rural Bank of San Fernando (Camarines Sur) Inc., Rural Bank of Barotac Nuevo Inc., and Rural Bank of Sibalom (Antique) Inc. last March 31.

Producers Bank, the surviving entity, would survive all the assets and liabilities of the seven banks. It continues to expand its footprint nationwide with the opening of two new branches as it aims to bring its network to 300 by the end of 2020.

The country’s 11th largest thrift bank in terms of assets currently has 176 branches.

Andres Cornejo, president and chief executive officer of Producers Bank, said the bank has been grabbing every opportunity to acquire banks via mergers and acquisitions to avail itself of incentives from the BSP and the Philippine Deposit Insurance Corp. (PDIC).

Producers Bank believes the acquisitions would further fasttrack its branch network expansion, resulting in sustained growth in assets and profits. The scheme also helps the bank avail of various incentives and regulatory benefits from the BSP such as but not limited to additional branch licenses.

The government continues to provide incentives under the consolidation program for rural banks (CPRB) to encourage mergers and consolidations among small banks particularly rural banks to further strengthen and enhance the viability of the banking system.

The CPRB aims to improve financial strength, enhance viability and generate better return to shareholders; strengthen management and governance; generate synergies and economies of scale through common infrastructure, systems and resources; as well as expand the market reach of rural banks.

Producers Bank has acquired 17 rural banks as it supports the BSP in promoting mergers and consolidations among banks as a means to develop larger and stronger financial institutions.

Other banks gobbled up by Producers Bank include Rural Bank of San Quintin in Pangasinan, Rural Bank of Bustos Inc. Rural Bank of Sto. Domingo (Nueva Ecija) Inc., Rural Bank of Rosales in Pangasinan, New Rural Bank of Victorias in Negors Occidental, Iloilo City Development Bank, Rural Bank of Cainta in Rizal, Rural Bank of Tayabas in Quezon, Tower Development Bank in Bulacan, and Rural Bank of San Fabian in Pangasinan.