MANILA, Philippines - BDO Unibank Inc. (BDO) has acquired the Rural Bank of San Juan Inc., formerly known as Banco San Juan. Completion of the transaction is set end July this year.
Included in the transaction is the 30 branches of the rural bank, located mostly in Metro Manila and selected areas in Luzon. It has total resources worth P2 billion.
In a report to the Philippine Stock Exchange (PSE), BDO said that the Bangko Sentral ng Pilipinas (BSP) had given the green light to go ahead with the transactions.
The Philippine Deposit Insurance Corp. (PDIC) had also given its consent to the consolidation of the banking business of the Rural Bank of San Juan Inc. into BDO “subject to certain conditions.”
When completed, BDO will be operating a branch network of at least 770.
And if “other certain conditions” are also met with the PDIC in relation to the acquisition of the Export and Industry Bank (EIB), BDO will get an additional 50 operating branches.
If the SM-led universal bank can get the same deal it carved out with the BSP prior to the receivership of EIB, it gets another 30 branch licenses as part of the incentive package given to acquiring banks.
It could thus be possible that by the end of 2012, BDO would be running over 800 branches or the biggest branch expansion in a single year.
BDO president and chief executive officer Nestor V. Tan always said that the bank “was always open as we need more branches.”
The direction of most commercial banks is to expand its middle market, small and medium enterprise (SME), and consumer client base. And critical to reaching out to these markets is the physical presence of the bank’s branch.
In the past years, the bulk of the banking system’s growth drivers had been growth of the SME and consumer market.
Majority of banks admit that the corporates tap the capital and equities market, resulting in low lending growth.
“The emerging markets is also fueled by strong private spending and middle enterprises,” McKinsey & Co., a respected global research institution pointed out.