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THE Bangko Sentral ng Pilipinas (BSP) expects a big bank merger this
year amid the global financial crisis.
BSP Governor Amando M. Tetangco Jr., said he
sees five to six lenders to emerge and account for 70 percent of
total bank assets after the current consolidation wave.
Five mergers have transpired in recent years,
consisting of the following combinations: Bank of the
Philippine Islands-Prudential Bank, Banco de Oro Unibank-Equitable
PCI Bank, Union Bank of the Philippines-International Exchange
Bank, Philippine National Bank-Allied Banking Corp., and China
Banking Corp.-Manila Bank.
“I still think five to six local banks
plus the branches of foreign banks holding about 70 of the
total banking system’s assets would be ideal,” Tetangco told
reporters.
He said banks should take advantage of
opportunities to consolidate or expand as this would suit their risk
and profit appetite, as well as their own overall assessments of the
economy.
As of September this year, the banking
system’s total resources rose by 11.2 percent year-on-year to P5.6
trillion. The increase was due to the rise in cash and loans account.
Universal and commercial banks continued to account for almost 90
percent of the total resources.
The number of banking institutions fell further
to 835 in September from 852 in 2007, reflecting continued
consolidation of banks as well as the exit of weak players.
By classification, the local system had 38
universal and commercial banks, 80 thrifts, and 717 rural lenders.
The combined number of branches hit 7,811 in
September last year from 7,736 in September 2007, with the increase
mainly accounted for by commercial and rural banks.
The BSP is pushing for stronger authority to
supervise distressed financial institutions.
Since last month, the BSP closed about 13 rural
banks that have been placed under receivership of state-run
Philippine Deposit Insurance Corp. (PDIC).
Juan de Zuniga, BSP assistant governor, said
earlier the central bank wants to directly participate in
rehabilitating and approving potential investors of local banks.
Under its charter, the BSP needs the consent of
bank management before it can get involved in the rehabilitation of
a bank.
-- Maricel E. Burgonio
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