Gokongwei buys thrift bank in Bocol, to do microfinance
GOKONGWEI-LED Robinsons Bank Corp. (Robinsons Bank) has purchased a
controlling stake in a Legazpi City-based thrift bank as it executes a
plan to gain a stronger presence in the highly competitive commercial
banking industry.
In an e-mail to BusinessWorld, Robinsons Bank -- the country's 28th
largest bank in terms of assets -- said it secured last Dec. 26 the
Monetary Board's green light to acquire "a controlling interest" in
Legazpi Savings Bank.
Legazpi Savings Bank, which had assets amounting P2 billion as of
September, was majority owned by Albay Representative Al Francis C.
Bichara. The bank has 11 branches in the Bicol Region.
"Robinsons Bank plans to utilize the capacity and branch network of
Legazpi Savings Bank as its vehicle to engage in countryside banking and
microfinance lending," Robinsons Bank President and Chief Executive
Officer Reynold Y. Gerongay said in the e-mail.
He declined to disclose the acquisition price.
Robinsons Bank extends microfinance loans through "SUPERLoan ng Bayan,"
a microfinance program targeting small- and medium-scale entrepreneurs.
The acquisition, Mr. Gerongay said, will give Robinsons Bank the
opportunity to boost its microfinance business and to strengthen and
expand its presence in the Bicol Region.
Legazpi Savings Bank extends "barangay business" loans and "market
vendors" loans, among other loan products, according to its website.
Robinsons Bank booked a net income of P353.5 million as of September, up
23.34% from the P286.6 million recorded in the same period last year,
due to hefty trading gains.
Banks are now training their sights on small and medium enterprises amid
low income growth from corporate lending and highly variable gains from
trading.
Robinsons Bank is a subsidiary of listed JG Summit Holdings, Inc. It
used to be a thrift bank until it purchased the Royal Bank of Scotland
(Philippines) from The Royal Bank of Scotland Plc and the Royal Bank of
Scotland N.V. through a share purchase agreement in February 2010.
A commercial banking license and several branches came with the
purchase, which was approved by the central bank and the Securities and
Exchange Commission on Dec. 9, 2010 and on May 25, 2011, respectively.
Lance Y. Gokongwei, Robinsons Bank chairman, in the same e-mail
concurred with Mr. Gerongay saying: "[Our] investment in Legazpi Savings
Bank is part of our plans to reach out to a wider market. Robinsons Bank
Corp. and JG Summit Holdings are always on the lookout for viable
opportunities for growth, and this investment shows our commitment to
being a strategic player in the industry."
For his part, Mr. Bichara, in the same e-mail, said: "We highly welcome
this investment by Robinsons Bank. It is good to know that Legazpi
Savings Bank will now be part of a big conglomerate to the benefit of
businesses and people in Albay as well as neighboring provinces in the
Bicol region."
Mr. Gerongay said the name of Legazpi Savings Bank will be retained as
the savings bank has a "good franchise" in Bicol.
Since the acquisition was under the Bangko Sentral and the Philippine
Deposit Insurance Corp.'s (PDIC) Strengthening Program for Rural Banks
Plus program, Robinsons Bank will be allowed to put up branches in
restricted areas in Metro Manila.
SPRB Plus program, is an enhancement of SPRB, a P5-billion program
initiated by the central bank and the PDIC in August 2010 to encourage
healthy rural banks to come to the aid of troubled peers. Under the new
program, universal and commercial banks may take over ailing rural or
thrift banks.
Asked if Robinsons Bank will add more branches to Legazpi Savings Bank,
Mr. Gerongay answered, "We'll do a lot of housekeeping first."
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CARLOS ANI - International Microfinance Consultant - SEEDFINANCE Corporation Chairman
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