The Market Monitor Minding the Nation's Business
The Philippine National Bank (PNB) is reviewing the financial profiles of rural banks (RBs) for a possible acquisition.
Local banks see rural banking as their next frontier for growth, as a big portion of the population, estimated to be 70 percent, are thought to be without a banking account.
Since the late 1980s, the number of Filipinos served by banks has declined as the poverty level began to rise.
“It is everyone’s aim to enter this 70-percent unbanked portion of the country,” said Reynaldo Maclang, PNB president and CEO.
If PNB does buy a bank, it will become the third universal bank to do so in the last three years. Capital-wise, the bank has enough capital buffers to acquire a bank, regardless of the asking price the target bank may ask.
PNB, the fifth biggest bank in assets at over P900 billion, already has a thrift bank, PNB Savings Bank, but it still wants to have a bigger depositors’ base through an acquisition.
Maclang said banks do not want to have a small depositors base if it wants to utilize more funds in lending operations.
“The bigger your assets, the bigger your loan portfolio—that is the ideal way of banking,” Maclang said. He added that PNB is looking at rural banks with good ratings from the Bangko Sentral ng Pilipinas (BSP).
“It’s not limited to small banks. It can be another thrift bank, but if you want to capture a bigger market, it has to be an RB,” he said.
Data from the Rural Bankers’ Association of the Philippines (RBAP) showed that at least five small banks have assets of more than P5 billion.
However, the biggest RB, One Network Bank, was bought by Banco de Oro Unibank just a year ago.
The Consunji-owned ONB has assets of over P20 billion and have just been promoted to a thrift bank.
Green Bank, Cantilan Bank, Tiaong Rural Bank, Inc., Rang Ay Bank, Card Bank, Camalig Bank and Quezon Capital Rural Bank are just some of the biggest rural banks.
“Not necessarily a rural bank, but as far as expansion is concerned, you can do more if you have a rural bank,” Maclang said his bank’s acquisition target.
JERRY MAGLUNOG