EAST WEST Banking Corp. (EastWest Bank) is acquiring the Green Bank of
Caraga, gaining an entry into the lucrative microfinance business.
In a statement, EastWest Bank said it has obtained the approval of the
Bangko Sentral ng Pilipinas for the purchase. It still needs to get the
green light of the Securities and Exchange Commission.
"This is another a milestone for EastWest Bank as this acquisition marks
our full entry into the small and microfinance arena," EastWest Bank
President and Chief Executive Officer Antonio C. Moncupa was quoted as
saying in the statement.
EastWest, seventeenth largest in asset terms as of the first quarter,
said it "plans to pursue the successful microfinance model of Green Bank
even as it plans to integrate most of Green Bank's branches into EastWest."
Mr. Moncupa told BusinessWorld through a text message yesterday, "At
this point, we don't know yet the exact number of Green Bank branches
that will be converted to EastWest Bank branches, but we have the
approval [from the BSP] to convert up to 41 of the 46 Green Bank branches."
EastWest, the banking arm of the Gotianun's Filinvest Development Corp.,
is focused on the consumer banking business while Green Bank, as most
rural banks, is engaged in microfinance, which involves the entension of
loans to the poor.
The acquisition of Green Bank will add P3 billion to EastWest Bank's
P83.1 billion in consolidated assets as of end-June and 46 branches in
Luzon, Visayas and Mindanao to its 117 nationwide.
Green Bank, based in Butuan City, is the largest rural bank in the
Caraga region in asset terms. It will be EastWest Bank's first
acquisition after snagging the local subsidiaries of the American
International Group, Inc. (AIG) in 2009.
The bank acquired AIG Philam Savings Bank, Inc., Philam Auto Finance and
Leasing, Inc., and PFL Holdings, Inc. when these units were put up for
sale to help pay for AIG's debts from the US government. AIG, then the
parent firm of the Philippine American Life and General Insurance Co.,
got a lifeline from the US government at the height of the financial crisis.
Prior to this, EastWest Bank bought Ecology Savings Bank, Inc. from the
Equitable PCI Bank in 2003.
Other big banks have entered the field of microfinance, noting the
massive returns. The Rizal Commercial Banking Corp. bought Pres.
Jose P. Laurel Rural Bank, Inc. based in Tanauan City and Merchants
Savings & Loan Association, Inc. in Mindanao (renamed into Rizal Micro
Bank) while the Bank of the Philippine Islands set up the BPI Globe BanKo.
EastWest Bank's net income rose by 3% to P884 million in the first
semester despite a slide in trading gains.
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