The central bank has approved the merger of six small banks into one stronger bank that would have a branch network in Luzon, Visayas and Mindanao.
In a statement, the Bangko Sentral ng Pilipinas (BSP) said the consolidation of six cooperative banks was approved under the regulator’s Strengthening Program for Cooperative Banks (SPCB), which extends incentives to merging banks.
The six banks were Cooperative Bank of Agusan del Sur, Capiz Settlers Cooperative Rural Bank, Cooperative Bank of Camarines Norte, Cooperative Bank of Leyte, Sorsogon Provincial Cooperative Bank and Southern Leyte Cooperative Bank.
In addition, the National Confederation of Cooperatives said it would infuse fresh capital into the merged bank, which would be named Network Consolidated Cooperative Bank (NCCB).
“This major event heralds the acceleration of the consolidation of the cooperative banking industry, aimed at contributing further to the health and soundness of the entire banking system,” the BSP said in a statement.
“Ultimately, this should redound to the benefit of the various stakeholders, including the public,” the regulator said.
The SPCB is an incentive program conceptualized by the BSP, Philippine Deposit Insurance Corp. (PDIC) and Land Bank of the Philippines. The program seeks to encourage mergers and acquisitions in the industry to strengthen the cooperative banking sector.
Incentives include leeway on certain regulations and financial assistance for eligible banks.
“This program is in recognition of the cooperative banks’ role in providing essential financial services in the economy, particularly in providing adequate banking services in local communities and in supporting growth of rural economies,” the BSP said.—Paolo G. Montecillo