PenBank mulls TB status

GENERAL SANTOS CITY, South Cotabato – The Peninsula Rural Bank Inc. (PenBank) is mulling to be upgraded to the thrift and savings bank (TB) category in the next three year, or it could remain among the highest capitalized rural bank in the country.

As of end October this year, total resources already reached P716.8 million placing it among the top 20 rural banks in the country in terms of resources and return on investments (ROI).

PenBank first vice president James B. Vargas said that their present operation is already a combination of commercial, thrift and rural banking.

"We are also open to acquisitions of entire banks or branch licences," Vargas added. Recently, it acquired five branch licences from Manila Bank.

He further revealed that the bank’s internal structure is already modeled for both commercial and rural banking operations. It has already recruited experienced bankers from commercial banks while maintaining a compliment of seasoned rural bankers.

The bank’s board already approved in principal the proposal to move towards a thrift bank status. However, he admitted that the next two years will vastly decide the outcome of their projections.

The country’s banking system has to make adjustments in adopting the new international accounting standards being implemented by the Bangko Sentral ng Pilipinas (BSP). Increases in provisioning and financial statements are expected.

Likewise, the performance of the Philippine economy cannot be discounted.

"But internally, we are poised for a change."

The bank’s total resources after 10 months into 2005 in fact surpassed the full year 2004 figure of P600 million as well as the P524 million in 2003.

Net income in end October stood at P30 million or nearly 49 percent better than the P20.2 million the previous year. Net earnings stood at P12.3 million in 2003.

Full year 2005 income target is a modest P32 million as the central Mindanao rural bank must make provisioning for the new accounting standards.

Networth stood at P112.5 million at the start of November.

Deposit liabilities was registered at P589 million while total loan portfolio stood at P522 million.

In the past three years, the growth rate of deposits averaged 20 percent while lending grew by 30 percent on the average.

It presently operates a branch network of 24, and it hopes to expand by at least 10 more by the end of 2007. The branches are located all over Mindanao and the Visayas.

Aside from traditional banking operations, PenBank also offers inward remittances, payment and payroll services, consumer loans including auto and mortgage loans. It anticipates to put in operation its automated teller machines (ATMs) at the start of 2006.

It is servicing export companies for banana and papaya aside from electric cooperatives, and the fishing operations at the General Santos Fish Port.

PenBank started from the Rural Bank of Tupi in 1980. In 1996, Rodrigo E. Rivera Sr. acquired 100 percent of the rural bank and renamed it PenBank. It is an accredited participating bank for government financing programs of the Land Bank of the Philippines, the Development Bank of the Philippines, Quedancor Intergrated Financing Program, SB Corp., the National Livelihood Support Fund, and the Coconut Industry Investment Fund.

It is an affiliate of the RD Corp., one of the biggest Mindanao-based business conglomerates. The flagship of the RD Corp. is the RD Fishing Industry Inc. which operates a fishing fleet. It is also considered the second biggest employer of Papua New Guinea after the PNG National Government.

The conglomerate also operates canning, ship repair, RD Pawnshops (said to be among the largest nationwide), jewelry, agriculture and agri-businesses, transport companies for both passenger and cargo, hotels, resorts, property development, travel agencies, and non-life insurance.