China Bank Savings (CBS) has secured the go-signal from its shareholders to pursue with its plan to merge with Pampanga-based rural lender Unity Bank.
CBS, the subsidiary of listed China Bank, reported in its disclosure to the Philippine Stock Exchange that it is set to push through with its merger plan now that its shareholders approved it.
However, the merger is still subject to the approval of the Bangko Sentral ng Pilipinas (BSP) and the Securities and Exchange Commission. Once approved, Unity Bank will be folded under CBS and its branches will be converted to CBS’ core banking system and renamed CBS.
CBS is submitting the merger documents on or before August 15, 2013.
BSP approved China Bank’s acquisition of 99.95 percent of Unity Bank’s outstanding subscribed capital stock in November 2012. According to the bank, it purchased Unity Bank’s interest for P400 million to expand CBS’ footprint.
“The acquisition supports BSP’s Strengthening Program for Rural Banks Plus [program], which aims to effectively serve the countryside and improve the delivery of financial services to rural communities by strengthening the thrift and rural banking industry,” CBS cited.
With the approval of the acquisition, BSP’s policy-making Monetary Board waived licensing fees for 18 more branches to be opened in restricted areas, and another six branches upon final approval of the merger.
CBS President Alberto Emilio Ramos said that the merger fast-tracks the savings bank’s branch expansion program.
“From this deal alone, we will have at least 73 branches by yearend, on track to meet
the target of 100 branches by 2014,” he added.
CBS has opened nine branches in the first half of the year, bringing the branch count to date to 42, from 33 last year.
Ramos also reported that the savings bank performed well in 2012 and that it was able to sustain the momentum in the first half of 2013.
Loans stood at P6.3 billion, up 124 percent, and deposits grew 77 percent to P11 billion.
Madelaine B. Miraflor