Merger of 2 RCBC units OKd

Yuchengco-led Rizal Commercial Banking Corp. has obtained its board’s approval to merge newly acquired niche banking units Merchants Savings and Loan Association Inc. and President JP Laurel Rural Bank into a single platform for microfinancing.

In a disclosure to the Philippine Stock Exchange on Thursday, RCBC said its board had approved the merger of the two banks subject to the final approval of the Bangko Sentral ng Pilipinas.

Merchants Bank, which is now doing business under the name of Rizal Microbank-A Thrift Bank, is widely expected to be the surviving entity given its thrift banking license.

By merging the two microfinance-oriented banking units, RCBC can realize synergies through the use of a single platform and consolidated manpower structure that will allow the merged bank to scale up operations.

As of end-2010, Merchants Savings has P229.21 million in assets and a loan book of P54 million, based on the latest statement of financial condition reported to the BSP. The bank has a minimal deposit base of P1.73 million but has P376 million in capital stock.

There is no available financial statement for JP Laurel as of press time.

When RCBC took over JP Laurel in 2009, it created a P375-million shareholder advance facility that was infused over the last three years.

The rural bank’s geographic coverage was cited as an important market for the overall business thrust of RCBC for its various products, including microfinance or lending to the entrepreneurial poor.