Philippine banks down to 632 in 2015

MANILA, Philippines - The number of banks operating in the Philippines continued to decline last year with the exit of weak players particularly rural banks, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.

Data from the central bank showed the number of big and small banks operating in the country reached 632 last year, 16 less than the 648 in 2014.

“This indicates the continued consolidation of banks as well as the exit of weaker players in the banking system,” the BSP said.

The number of big banks or universal and commercial banks went up to 40 in 2015 from 36 in 2014 with the entry of new foreign banks. These consisted of 21 private domestic banks, 12 foreign bank branches, three government banks, and six foreign bank subsidiaries.

President Aquino signed RA 10641 in July last year amending the foreign banks law by removing the limit of foreign banks in the country earlier set at only 10.

Foreign banks under the new law have also been allowed to own as much as 100 percent of any local bank, removing the previous cap of 60 percent.

So far, the BSP has also allowed six more foreign banks to set up shop in the Philippines. These include Sumitomo Mitsui of Japan, Cathay United Bank of Taiwan, the Industrial Bank of Korea, Seoul-based Shinhan Bank, Yuanta Bank of Taiwan, and United Overseas Bank Limited (UOB) of Singapore.

The BSP said the number of thrift banks reached 69 last year from 68 in 2014 while the number of rural and cooperative banks decreased by 3.5 percent to 524 from 543.

The BSP ordered the closure of 14 rural banks that were placed under the supervision of the state-run Philippine Deposit Insurance Corp. (PDIC) in 2015.

The BSP together with PDIC and Land Bank of the Philippines have issued the guidelines for the Consolidated Program for Rural Banks (CPRB) to further encourage mergers and consolidations among rural banks.

Meanwhile, the BSP reported the number of branches and other offices of Philippine banks went up by 3.8 percent to 10,756 last year from 10,361 in 2014.

“The number of banks declined but operating network continued to expand,” it added.

The branches of big banks increased 3.9 percent to 6,060 from 5,833 while the branches of thrift banks went up 8.6 percent to 2,086 from 1,920.