EastWest readying for microfinance
EAST WEST Banking Corp. (EastWest Bank) will merge the assets of its two
rural bank subsidiaries as part of plans to strengthen its entry into
the lucrative microfinance business, its top official said.
"Finman Rural Bank, Inc. will purchase the assets of Green Bank, Inc.,
then we will rename Green Bank to EastWest Rural Bank," EastWest Bank
President and Chief Executive Officer Antonio C. Moncupa, Jr. said at
the sidelines of the Rural Bankers Association of the Philippines 60th
Annual Convention in Sofitel Philippine Plaza in Manila last Tuesday.
"We are only awaiting for the BSP's (Bangko Sentral ng Pilipinas)
approval to merge the assets of Green Bank to Finman," he added.
EastWest Bank acquired Finman Rural Bank, a single-unit bank based in
Pasig City, in June last year. In 2011, EastWest Bank purchased
Caraga-based Green Bank, which has 46 branches nationwide.
Prior to Green Bank, EastWest Bank acquired AIG Philam Savings Bank in
2009 and Ecology Savings Bank, Inc. in 2003.
The universal bank acquired the two rural banks to be able to engage in
lending to micro and small borrowers and cater to unbanked areas.
Bangko Sentral ng Pilipinas data show that 611 or 37% of the 1,634
municipalities in the country still have no banking offices.
The two rural banks engage in microfinance, which involves extension of
loans to the poor.
Asked how EastWest will beef up its rural bank arm, Mr. Moncupa replied:
"Once we have already established our presence in Mindanao through Green
Bank, that is the time we will invade Luzon."
"We are growing very fast...We are preparing an invasion from Mindanao
to Luzon. We are training our ground forces...From Mindanao and Visayas,
then we are going to Luzon," he said.
"We have to make ready our systems, our audit, our infrastructure and
everything else that goes with it. We have to man the people here. We
have to look for sites. We have to put up more branches."
In September last year, EastWest Bank's board of directors approved a
P120-million equity infusion in Finman Rural Bank and the conversion of
P700 million worth of loans to Green Bank into equity.
Asked if EastWest Bank will acquire another rural bank, he said: "If you
have good assets, a good customer base, we are willing to look into it."
EastWest Bank booked a net income of P735 million in the first quarter,
up 60% from the P460 million it posted in the same period last year.
EastWest Bank shares closed at P33 apiece last Tuesday, down 60 centavos
or 0.1.78% from their P33.60 finish the day before. -- Ann Rozainne R.
Gregorio
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