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Business

2 more rural banks merge

Lawrence Agcaoili - The Philippine Star
2 more rural banks merge
BSP Deputy Governor Chuchi Fonacier said the merger between Bayanihan Bank Inc. and Rural Bank of Pozorrubio Inc. took effect last Sept. 1 after obtaining the necessary regulatory approvals.
Geremy Pintolo / File

MANILA, Philippines — Two more rural banks have combined forces to enhance their financial stability, aligning with the Bangko Sentral ng Pilipinas (BSP)’s ongoing efforts to enhance risk management in the industry.

BSP Deputy Governor Chuchi Fonacier said the merger between Bayanihan Bank Inc. and Rural Bank of Pozorrubio Inc. took effect last Sept. 1 after obtaining the necessary regulatory approvals.

Bayanihan Bank would be the surviving entity, while the Pangasinan-based Rural Bank of Pozorrubio would be the absorbed corporation.

Quezon-based Bayanihan Bank, established in May 1960, would absorb all the assets and liabilities of the Rural Bank of Pozorrubio.

Based on its website, Bayanihan Bank, formerly known as the Rural Bank of Atimonan, was reestablished in 2009 under the leadership of Jose Paolo Palileo after years of stagnation.

The BSP’s Monetary Board has so far ordered the closure of six problematic small banks including United Consumers Rural Bank, Bangko Pangasinan – A Rural Bank, Rural Bank of San Juan (Southern Leyte), Binangonan Rural Bank, Rural Bank of San Marcelino, and Rural Bank of San Agustin (Isabela).

Last year, the BSP ordered the closure of nine banks. In 2021,the number of problematic banks ordered closed by the central bank almost tripled to 13 from five in 2020 due to the impact of the COVID-19 pandemic.

The BSP 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.

Branch-lite unit of rural banks are not included in the number of branches.

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