MANILA, Philippines—The thrift bank arm of China Bank has obtained shareholders’ consent to merge with Pampanga-based rural lender Unity Bank, a move that is meant to speed up its expansion program.
The merger between China Bank Savings (CBS) and Unity Bank is still subject to approval by the Bangko Sentral ng Pilipinas and the Securities and Exchange Commission, after which Unity Bank will be folded under CBS and its branches will be converted into CBS’ core banking system and rebranded.
“From this deal alone, we will have at least 73 branches by year-end, on track to meet the target of 100 branches by 2014,” CBS president Alberto Emilio Ramos said in a press statement.
CBS has so far opened nine branches in the first half of the year, bringing the branch count to 42, from 33 last year.
Parent bank China Bank, which is majority owned by the family of Henry Sy, acquired 99.95 percent of Unity Bank’s outstanding shares for P400 million in November last year, a transaction really meant to expand its thrift bank arm CBS.
CBS plans to submit the merger documents on or before August 15.
The acquisition is seen supporting a Bangko Sentral ng Pilipinas program to strengthen rural banks to effectively serve the countryside and improve the delivery of financial services to rural communities.
With the approval of the acquisition, the BSP waived licensing fees for 18 more branches to be opened in restricted areas, and another six branches upon final approval of the merger.
Ramos also reported that the savings bank performed well in 2012 and that it was able to sustain the momentum in the first half of 2013.
CBS grew its total resources in 2012 to P9.6 billion, expanding its total loan portfolio by 126 percent to P4.3 billion as all loan product lines contributed to the growth. Total deposits rose by 88 percent to P8.3 billion.
For the first half of 2013, CBS grew its loan book by 124 percent to P6.3 billion year-on-year while deposits rose by 77 percent to P11 billion.
CBS, which is focused on the retail market, began operations in 2008 following China Bank’s acquisition of Manila Bank.