Yao group-led thrift bank Philippine Business Bank (PBB) has obtained approval from the Bangko Sentral ng Pilipinas to merge with rural bank Insular Savers Bank Inc. (ISBI), with the former as the surviving bank.
To recall, PBB announced the acquisition of ISBI, the rural banking arm of the Martirez family, in 2015. The earlier agreed price was P519.2 million for 100 percent of ISBI but based on a disclosure to the Philippine Stock Exchange on Monday, PBB’s board approved the acquisition for P575 million.
The deal is seen to accelerate PBB’s entry into the high-yielding consumer finance business.
The merger of the two banks will add an estimated 10 percent to PBB’s bottom line, the disclosure said.
“This transaction gives PBB an opportunity to further strengthen its consumer lending business while establishing a foothold in microfinance market,” the disclosure said.
PBB plans to use ISBI’s existing teacher’s loan license and offer the “Makaguro Loan” to its clients through select PBB branches nationwide.
The transaction is still subject to approval by the Securities and Exchange Commission.
In 2012, ISBI acquired Filipino Savers Bank to gain foothold in the salary loans business and since then established relationships with the regulatory agencies, opening channels to offer salary loans to public school teachers.
The rural bank currently services its market through its 10 existing branches in BGC, Cainta, Pampanga, Baliuag, Calamba, Quezon Avenue, Navotas, Makati City, Iloilo, and Legazpi.
Today, ISBI is a key player in the micro-lending, retail car financing, teacher’s loan, and salary loans market. As of October 2018, its loan book stood at P1.25 billion while deposit portfolio amounted to P1 billion. Shareholder’s equity was at P667.2 million. /kga