Enhanced SPRB launched
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THRIFT and commercial banks have been added to the list of “white knights” to problematic rural banks, in an enhancement of a program designed to strengthen the rural banking sector.
They dubbed the new program SPRB Plus, pointing out that the original program, SPRB, allowed only “strong” rural banks to act as white knights to other rural banks.
SPRB Plus, according to the BSP statement, “is envisioned to further strengthen the rural banking system, boost confidence, and improve the delivery of financial services to rural communities.”
It should result in faster consolidations among rural banks, the central bank added.
The SPRB is a P5-billion program initiated by the BSP and PDIC in August 2010. A two-year program, it will end in August this year.
The SPRB Plus will utilize the original program’s remaining funds. It will take effect immediately and will be in place until December 31, 2013.
The original program extends financial assistance, subject to the approval of both the BSP and PDIC, to strategic third party investors that want to consolidate or merge with capital-deficient rural banks.
The new program “offers a variety of financial and regulatory relief and incentives to improve the prospects for success of new banking partnerships,” the BSP said.
“Financial assistance may be granted by PDIC to augment capital shortfalls and attract new investors. BSP has also put on the table an expanded package of regulatory relief and branching incentives for commercial, thrift and rural bank that step forward as white knights,” it added.
Central bank officials, however, were not available yesterday to expound on this “expanded package” of incentives.
The BSP and the PDIC claimed they received “strong expressions of interest” from banks about SPRB Plus.
For the SPRB, the PDIC has received 17 applications involving 31 rural banks for the SPRB as of March 2012. Four of these applications have been approved while two are being processed.
For the Strengthening Program for Cooperative Banks (SPCB), which seeks mergers, consolidations and acquisitions in the cooperative banking sector, 24 out of the 40 cooperative banks have expressed interest. The SPCB, the first enhancement of the SPRB, was launched in November 2011.
“PDIC is now evaluating three SPCB applications involving 14 cooperative banks,” according to the statement.
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