THE BANGKO Sentral ng Pilipinas (BSP) has approved the consolidation of four agricultural rural banks to form Agribusiness Banking Corp. – A Rural Bank (Agribank), which has now commenced its operations.

The BSP on May 30 issued Agribank a certificate of authority, it said in a circular. The bank began operating on June 16.

The Monetary Board approved the consolidation of Agribusiness Rural Bank, Inc., Banco Alabang, Inc. (A Rural Bank), Rural Bank of Maddela (Quirino), Inc., and Rural Bank of San Jacinto (Masbate), Inc. to form the new rural lender via a resolution dated Jan. 23.

Agribank was registered with the Securities and Exchange Commission on Feb. 14.

The BSP has been encouraging rural banks to consolidate as part of its Rural Bank Strengthening Program (RBSP) that was launched in 2022.

The RBSP features five time-bound tracks that aim to strengthen the capital position of rural banks: merger/consolidation, acquisition/third-party investment, voluntary exit/upgrade of banking license, capital buildup program, and supervisory intervention.

In September 2022, the BSP raised the minimum capital requirement for rural banks with a head office and as many as five branches to P50 million, while those with six to 10 branches must have a minimum capital of P120 million. Those with more than 10 branches must have a capital of at least P200 million. Rural banks have until 2027 to comply with the new rules.

Rural banks booked a combined net income of P3.09 billion in the first quarter and assets worth P471.17 billion at end-March, latest central bank data showed.

There were 3,064 rural and cooperative bank offices operating in the Philippines as of May, down from 3,576 a year prior. These include 379 head offices and 2,685 branches or agencies. — AMCS

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