Merger of China Bank unit with rural bank approved
THE MERGER of China Bank Savings Inc. and Pampanga-based Unity Bank,
Inc. (A Rural Bank) has been greenlighted by the central bank, allowing
the Sy-led thrift bank to build its presence in the countryside.
The Monetary Board of the Bangko Sentral ng Pilipinas (BSP) on Nov. 21
approved the merger between the two banks, with China Bank Savings as
the surviving entity, "on the condition that the merger will be
implemented within six months," China Banking Corp., the parent of China
Bank Savings, said in a disclosure yesterday.
The banks are now awaiting the nod of the Securities and Exchange
Commission -- the last regulatory approval needed to fully implement the
merger.
China Bank said the deal was done under the BSP's Strengthening Program
for Rural Banks Plus (SPRB Plus), which aims to improve the delivery of
financial services in the countryside.
Under the P5-billion program, universal, commercial and thrift banks are
encouraged to rescue ailing rural and thrift banks in exchange for a
spate of incentives.
The merger will expand China Bank Savings' network to 90 branches,
gaining 15 branches from Unity Bank and 24 new branch licenses in
restricted areas from the BSP -- one of the incentives under SPRB Plus
"With the merger, [China Bank Savings] is on track to meet its target of
73 branches by yearend and 100 by next year," the bank said in a statement.
The BSP last year approved China Bank's acquisition of 99.95% of Unity
Bank's outstanding subscribed capital stock.
China Bank Savings began operations on September 2008 following China
Bank's acquisition of Manila Bank the year prior.
In September, a memorandum of agreement was also inked for Planters
Development Bank -- the country's leading bank for small and medium
enterprises (SME) -- to become a part of the China Banking Group.
The merger between China Bank and Plantersbank is expected to bolster
the former's SME portfolio and network expansion.
China Bank saw its consolidated net income grow 25% to P3.93 billion as
of the third quarter from P3.14 billion in the same period last year.
As of September, the Sy-led bank's assets climbed 15% to P359.03 billion.
Its shares remained flat at P60 apiece yesterday. -- Diana Jean B. Evite
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