2 more rural banks merge

MANILA, Philippines — Two more rural banks merged their operations last month to boost the financial strength of the industry amid the initiatives of the Bangko Sentral ng Pilipinas (BSP) to improve the risk management of small banks.

The BSP said the merger between Banco Santiago de Libon Inc. (A Rural Bank) and Municipal Rural Bank of Libmanan (Cam Sur) Inc. took effect last Dec. 31.

Banco Santiago de Libon is the surviving bank as it absorbed the entire assets and liabilities of Municipal Rural Bank of Libmanan.

Last Dec. 7, the Securities and Exchange Commission (SEC) approved the Articles and Plan of Merger executed on May 15, 2021, Supplemental Articles and Plan of Merger executed on March 16 and Sept. 30, respectively last year.

The corporate regulator also approved the second Supplementary Plan of Merger executed last Sept. 30.

Last October, the BSP also announced the merger between Camalig Bank Inc. and the Municipal Rural Bank of Nabua (Camarines Sur) Inc. Camalig Bank was the surviving entity.

In 2023, the BSP’s Monetary Board has ordered the closure of seven problematic small banks including the Rural Bank of Talisay (Cebu), United Consumers Rural Bank, Bangko Pangasinan, Rural Bank of San Juan (Southern Leyte), Binangonan Rural Bank, Rural Bank of San Marcelino and Rural Bank of San Agustin (Isabela).

To strengthen the sector, the central bank has rolled out   the Rural Bank Strengthening Program (RBSP) to enhance the operations, capacity, and competitiveness of the industry.

The regulator earlier raised the minimum capital requirements for rural banks to at least P50 million to enhance the operations, capacity and competitiveness of small banks.

Under the new capital structure, the minimum capitalization of rural banks would be P50 million for those with a head office and only up to five branches, P120 million for those with six to 10 branches, and P200 million for small banks with more than 10 branches.