By Melissa Luz T. Lopez, Senior Reporter
A THRIFT BANK has absorbed two smaller lenders within Central Luzon, in line with a push by the Bangko Sentral ng Pilipinas (BSP) for bank mergers.
In a circular issued last week, the BSP said Producers Savings Bank Corp. (PROSB) has merged with the Rural Bank of Bustos, Inc. from Bulacan and the Rural Bank of Sto. Domingo, Inc. based in Nueva Ecija.
BSP Deputy Governor Chuchi G. Fonacier issued Circular Letter 2018-055 on July 17 to announce that PROSB has been named as the surviving corporation following a merger plan executed by the three small banks in August 2017.
The Securities and Exchange Commission approved the consolidation last month, paving the way for the merged thrift bank to start its new operations on June 29.
PROSB is a thrift lender headquartered in Pasig City led by Andres M. Cornejo as president and chief executive officer. Former Land Bank of the Philippines president Gilda E. Pico is currently the bank’s chairman.
The bank has 166 branches.
It is the 14th biggest thrift lender in the country as of end-March with P14.977 billion worth of assets, according to latest available central bank data.
The bank booked P226.255 million in consolidated net income in 2017, down from the P311.796 million made a year ago.
With the merger, the BSP said the entire assets and liabilities of the two provincial banks “will be transferred to and absorbed by” PROSB.
The central bank has been encouraging mergers among small banks in order to fortify their financial footing by dangling a host of incentives for those who pursue such plans.
State agencies have also extended the Consolidation Program for Rural Banks (CPRB) until 2019 to prod lenders located in one province or region to come together and form a new financial entity. These mergers are seen to bolster the capital and asset base of these lenders, making them more liquid and resilient versus defaults.
The central bank has ordered four banks to shut down this year after they were found with unhealthy balance sheets and insufficient assets to remain in business.