THE MERGER of Rizal Commercial Banking Corp. (RCBC) and its thrift banking subsidiary, which is intended to reduce operating costs and consolidate the lender’s retail base, has been approved by the central bank.

In a regulatory filing on Tuesday, RCBC said the Bangko Sentral ng Pilipinas (BSP) approved on June 17 its merger with its thrift bank arm RCBC Savings Bank (RSB).

“We have received officially the approval of the BSP. We will now continue to work with the other regulatory approvals. After the BSP, we also have to consider other government agencies that have to approve the merger,” RSB President Rommel S. Latinazo said on the sidelines of RCBC Investment Forum yesterday.

In a previous disclosure, RCBC said it expects to complete its merger with RCBC Savings Bank on July 1, with RCBC assuming all assets and liabilities of the thrift bank.

Following the central bank’s approval of the consolidation, Mr. Latinazo said the banks still need the green light from the Securities and Exchange Commission as well as the Bureau of Internal Revenue.

“We have a team that’s working on the approvals. What we can say is the process is ongoing. It’s moving as planned,” he said, adding he is hopeful of meeting the July 1 completion target.

“Once we get the approvals, we should be able to effect the merger and the target is July.”

Announced in September, the consolidation of RCBC and its thrift bank will allow for more efficient capital deployment and operational cost efficiencies, the listed parent has said.

Once the merger is complete, RCBC will have a combined branch network of over 400, with 149 offices coming from its savings arm.

Mr. Latinazo said roughly 500,000 RSB clients will be infused into the client base of RCBC.

“In terms of products, the unibank has more products to offer both depository and other banking services. And from a consumer business standpoint, it means a bigger access of customer base for us, especially if you’re talking about consumer finance,” he added.

Mr. Latinazo earlier said RCBC’s consumer lending business will expand further as its thrift banking arm is absorbed by the parent.

He added that the bank would “like to be guided” by the 20% compounded annual growth of its consumer lending business for the past five years.

With the consolidation of the thrift lender into its parent bank, Mr. Latinazo said the consumer business will continue to be “one of the pillars of growth” for RCBC.

Apart from the consolidation, the robust growth in the middle market will boost RCBC’s consumer lending going forward.

Latest central bank data showed RSB was the third-biggest thrift bank in asset terms at P139.92 billion as of end-2018.

RCBC posted a P1.3-billion net income in the first quarter, up 15% from the P1.1 billion booked in the same period in 2018.

Its shares closed at P28.05 apiece on Tuesday, down 30 centavos or 1.06%. — Karl Angelo N. Vidal