REGULATORS have approved Banco de Oro Unibank’s (BDO) takeover of the country’s largest rural bank, in line with the Henry Sy group’s aspiration to establish a bigger financial footprint in the Philippine countryside.
BDO, the country’s largest bank, said the Bangko Sentral ng Pilipinas (BSP) gave its go-ahead for the merger with the Consunji family’s One Network Bank (ONB).
The rural bank has total assets of P28.1 billion, net loans of P19.7 billion and a deposit franchise amounting to P17.9 billion as of the end of September 2014.
“The combination of ONB’s regional presence and BDO’s financial muscle is seen to create new opportunities for growth,” BDO said in a statement late last year when the planned acquisition was first announced.
“This partnership will enable ONB clients to access BDO’s strong balance sheet and expanded banking solutions, while providing BDO inroads to new market segments.
BDO said this was also in support of the BSP’s thrust to promote inclusive banking through countryside branching and lending.
The Consunji group’s entry into rural banking was prompted by an earlier desire of DMCI group chair emeritus David Consunji to provide financial access to people in agricultural areas.
BDO’s takeover comes amid the opening up of the local banking sector to more foreign participation, which should lead to higher competition.
This liberalization comes by way of two landmark laws passed in the last two years. In 2013, Congress passed a legislation that allowed foreign firms to take in majority stakes in rural banks. The law aims to help modernize the rural banking sector, which posted the highest amount of bad loans and bank closures every year.