Union Bank group acquires rural bank, ventures into microfinancing
Aboitiz-led Union Bank group is venturing into rural banking and microfinancing with a deal to acquire a majority stake in 11-branch Cebu-based First-Agro Industrial Rural Bank (FairBank).
The acquisition—which will be made though Union Bank’s wholly-owned subsidiaries, Union Properties Inc. (UPI) and City Savings Bank—has been approved by the Monetary Board, the highest policy-making body of the Bangko Sentral ng Pilipinas.
“We are thrilled about this acquisition because it serves as a first step in serving our unbanked countrymen,” said Eugene Acevedo, CitySavings chair and UnionBank senior executive vice president.
“We are grateful to the founding owners of Fairbank for trusting us to continue their microfinance mission.”
Microfinancing loans are small loans granted to the basic sectors, on the basis of the borrower’s cash flow and other loans granted to the poor and low-income households for their microenterprises and small businesses to enable them to raise their income levels and improve their living standards. These loans are typically unsecured but may also be secured in some cases.
According to the BSP, the average microfinance loan in the Philippines is about P25,000 but the loan can be as low as P2,000 and as high as P150,000.
CitySavings is the thrift banking arm of UBP while UPI is engaged in managing the buildings and other real properties which are either wholly- or partially-owned by Union Bank.
After the acquisition, FairBank will remain structurally separate and will keep its company name and organization and its brand identity as a “dependable partner for a brighter future.”
Established in 1999 in Daanbantayan in the northernmost tip of Cebu, FairBank has more than 200 employees and total resources of more than P360 million. It has more than 10,000 borrowers and a depositors’ base of over 20,000.
“FairBank, from its inception, has always been aimed at serving the microfinance community. With this partnership, we hope to further the reach of our services to the under-served communities around the Visayas and beyond. This partnership shall strengthen our tenacity and open new possibilities,” said Dinah FernanVerallo, president, chief executive officer and chair of FairBank. —DORIS DUMLAO-ABADILLA
