The Market Monitor Minding the Nation's Business
By Riza Lozada
The Philippine Business Bank (PBB) is targeting to increase its reach in the country through a merger with Insular Savers Bank Inc. (Isbi) and the acquisition of Bataan Savings and Loan Inc.
PBB informed the Philippine Stock Exchange that it will hold a special stockholders meeting on December 18 to seek approval for the planned acquisition and purchase of all the outstanding and issued shares of stocks of Isbi and the merger of the PBB and Isbi, where PBB is the surviving bank, and the approval for the acquisition and purchase of all the assets and assumption of liabilities of Bataan Savings.
PBB President and CEO Rolando Avante said the bank has filed applications to the Bangko Sentral ng Pilipinas (BSP) for 17 licenses for new branches to bring to 140 total branches by year-end.
With branches in Luzon and the Metro Manila, PBB caters to the SME industry, representing 63 percent of its total loan portfolio.
PBB acquired the Cavite-based Rural Bank of Kawit Inc. in June. PBB’s initial public offering (IPO) raised $98.8 million, which it is now using for branch expansion targeting to set up a total of 100 branches across the country.
The bank received regulatory approval to open up 26 new branches in 2014 in various locations in Luzon, Visayas and Mindanao as part of its purposes of expanding its network closer to the SME market. Avante also bared a new strategy to remain competitive in the banking industry.
“We are now employing a franchise strategy in our new acquisitions. The new branches, when they open, they become a distribution center; taking deposits and looking for clients as well as an outlet for other products such as insurance, trust, loans and other fixed-income securities. From a traditional banker, the branch manager will now take on the role as a business manager. With this method, there will be expectation of a better income,” he said.
This year, the key driver for asset growth will be the opening of new outlets, the branch expansion in high growth areas where robust SME markets are located, specifically on the provinces and secondary cities.
The management is also looking for connections and ways to expand in the Visayas-Mindanao area in the light of the upcoming entry of foreign and regional banks as part of the Asean Financial Integration.
“These are exciting times for PBB. When the regional banks come in, they will be looking for local partners to acquire thru a joint venture or take over a bank and there will be more players. When this happens, the beneficiary would be the consumers, as the ensuing competition would mean better service and lower rates. For us, what we lack in size, we do in other areas, especially in quality of service. After all, banking is a more than a transaction, it’s a relationship. And that is why, the PBB remains the bank of choice for SMEs,” Avante said.