ONB plans to acquire rural banks in Visayas
MANILA, Philippines—One Network Bank (ONB), one of the top rural banks in the country and the biggest in Mindanao, intends to acquire smaller industry players in the Visayas to establish its presence in more promising areas outside Metro Manila.
ONB had initially planned to expand in the Visayas via the establishment of its own branches. Now, according to its president, the bank is considering acquiring one or more existing rural banks in the area.
At present, ONB’s 80 branches and 104 automated teller machines are all in Mindanao.
Alex Buenaventura, president of ONB, said in an interview with the Inquirer that the plan to acquire rural banks based in the Visayas was partly inspired by the incentives being offered by regulators to banks that would acquire smaller members of the industry.
The Bangko Sentral ng Pilipinas and the Philippine Deposit Insurance Corp. recently implemented a program—the Strengthening Program for Rural Banks—providing, among others, regulatory relief and loans to banks that will acquire banks with low capitalization.
Buenaventura said he met recently with representatives from a group of rural banks in the Visayas and discussed with them the prospects of consolidation.
He said some rural banks in the Visayas had expressed interest in consolidation to establish stronger financial institutions that could better serve the financial services needs of clients form rural areas.
“Through consolidation, rural banks will be able to generate bigger capital that is necessary to deliver comprehensive services to clients. Consolidation will help rural banks better compete with commercial banks,” Buenaventura said.
