Rural banks as white knights?

From a potential acquiree, rural banks may soon find themselves as a possible acquirer this time around.

In a dramatic twist of events, well-capitalized rural banks are now in a position to acquire ailing cooperative banks. This came about after the Bangko Sentral ng Pilipinas (BSP), Philippine Deposit Insurance Corp. (PDIC) and Land Bank of the Philippines have extended the incentive program that encourages mergers and acquisitions involving coop banks, dubbed as the Strengthening Program for Cooperative Banks (SPCB) Plus. The program now expands the eligible strategic third-party investor, or STPI to include strong and well-managed rural banks and thrift banks, in addition to commercial banks, primary cooperatives and federations of cooperatives.