‘Apex Bank’ opens in 2004

A specialized financial corporation designed exclusively to service the rural banking system as well as countryside development will be in place next year.

The proposed Apex Organization is a joint venture between the Land Bank of the Philippines (LBP) and the rural banking system. Forty percent equity will be controlled by the LBP while the remaining 60 percent will be sold to investors mainly coming from the ranks of the country’s rural banking system.

Proponents said that initial capitalization is targeted at P100 million but these could expand as more investors join the bandwagon.

"We will be holding roadshows to look for prospective investors as well as popularize the Apex Organization concept," said Wilfredo C. Maldia, LBP first vice president.

Maldia said that the objective of establishing the apex organization was to deepen the role of the rural banking system towards rural development. That could be achieved if there is a strong countryside financial institution system that achieves an efficient and sustainable credit delivery system.

For years, the rural banking system has been looking for fund sources, which it could lend to the countryside where it has extensive access over other financial institutions. It has to tap the commercial banking system which offers high interest rates for loans.

Not too long ago, the Bangko Sentral ng Pilipinas (BSP) established a lending window specifically for rural banks to stand as another source of funds for lending.

But the apex organization is envisioned to offer funds at even more competitive rates while allowing rural banks access to other funds.

Initially, the quasi-financial institution would offer liquidity and funds management services including borrowings, investments and direct liquidity assistance.

It also hopes that by the first year of its operation, it could establish the apex network including integrated ATM facilities, remittances services, and point-of-sale (POS) terminals.

As the apex organization expands, it would offer auditing and accounting services including bookkeeping and system audit services. Also made available would be standard and customized training programs.

It would also help professionalize the system through various financial consultancy services. These includes: loan syndication and arranger; merger, consolidation and acquisition advisory services; disposal of ROPOA; project financing; and initial public offerings (IPOs). – Ted Torres