Rural bank eyes yet another merger

MANILA, Philippines—Producers Savings Bank Corp. has completed its integration with Bank of Victorias Inc., the largest rural bank on Negros Island, and is now working on its merger with Iloilo City Development Bank.

Edmundo Medrano, vice chairman and president of Producers Bank, said in a statement that, with 81 operating branches plus 22 soon-to-open branches, Producers Bank now has the largest branch network among stand-alone thrift banks or those not affiliated with large banking groups.

In January, Producers Bank filed an application with the Bangko Sentral ng Pilipinas and the Philippine Deposit Insurance Corp. to merge with Iloilo City Development Bank (ICDBank), Producers Bank’s thrift bank subsidiary, with Producers Bank as the surviving thrift bank entity, Medrano said. ICDBank currently has eight operating branches with five approved but unopened branches.

The merger of Producers Bank and ICDBank will result in a 116-branch network. This does not count additional branch licenses that the BSP may provide as an incentive to the forthcoming merger.

Medrano said that Land Bank of the Philippines had approved a new 10-year subscription to Producers Bank’s unsecured subordinated debt eligible as lower tier 2 capital, amounting to P450 million. Producers Bank earlier exercised its call option on its P120 million tier 2 notes which were also subscribed to by Land Bank.

To date, Medrona said, Producers Bank is the largest lender to individual palay farmers. It has also started to lend to sugar farmers.

In 2012, Producers Bank reported unaudited total resources of P7.67 billion—a 15.67 percent higher than that of the previous year.