THE THRIFT BANKING arm of Bank of the Philippine Islands (BPI) is reluctant on merging with its parent bank as it looks to continue taking advantage of the regulator’s smaller reserve requirement for thrift lenders.

BPI Family Savings Bank President Maria Cristina L. Go said in an interview that “it is not yet time” for the lender to merge with its parent bank.

“That’s something we always assess regularly. But as of this time, it’s not yet time to merge BPI Family,” she said. “It would really depend on the economic and regulatory environment.”

The Bangko Sentral ng Pilipinas (BSP) currently requires thrift banks to hold at least eight percent of their deposits, much lower than the 18% requirement on commercial and universal banks — which is considered to be one of the highest in the region.

The lower reserve requirement ratio (RRR) enables savings banks to place a bigger chunk of their funds in loans and investments.

“That gap is quite large and it doesn’t at the moment makes sense to merge because we’re able to leverage on lower reserve requirements,” Ms. Go said.

Ms. Go added that with the lower reserve requirements for thrift banks, BPI Family Savings is able to provide its clients low rates and affordable deposits.

BSP Governor Benjamin E. Diokno earlier said he wants to trim big banks’ RRR, describing it as still “very high.” He also signalled room for a percentage point cut in the ratio “every quarter for the next four quarters.”

In September, Rizal Commercial Banking Corp. (RCBC) announced it is set to absorb its thrift banking unit RCBC Savings Bank to reduce operating costs and consolidate capital. The merger is expected to be completed in the second half of the year.

Meanwhile, Philippine National Bank will also absorb its savings banking subsidiary PNB Savings Bank, widening its exposure to retail and small business clients.

BPI Family Savings was the largest thrift bank in the country in asset terms as of end-September 2018 with P271.52 billion.

The lender expects to post 10-15% loan growth for this year from a “flat” lending book in 2018, driven by housing and auto loans. — Karl Angelo N. Vidal

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