THE merger of four banks is one of three transactions undergoing review by monetary authorities, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno announced in a briefing last Thursday.
According to Diokno, aside from the merger, two consolidations and one acquisition are currently being processed by various departments of the BSP.
There have been a total of 17 bank mergers, three consolidations and one acquisition since 2019, the governor revealed. Most mergers were between two banks while four mergers involved three banks.
An example is the integration of PNB Savings Bank with Philippine National Bank that the Monetary Board approved through Resolution 1310 last August 29, 2019. PNB acquired the assets and assumed the liabilities of PNBSB.
Data from the Philippine Statistics Authority revealed that from 2006 to 2012, some 36 banks have merged, 28 of which are rural lenders.
During the briefing last Thursday, Diokno said while there are no ideal number of participants in the local banking system, he said mergers, consolidations and acquisitions (MCA) bode well for the industry.
“[MCAs], are aimed at creating stronger and more resilient banking institutions that are adaptive to ever-changing financial environments,” the governor said. “MCAs also result in banks’ higher capitalization, better economies of scale and wider market reach.”
Diokno added that the interagency agreement to streamline the process for bank MCAs supports efforts to encourage banks to pursue MCAs as an avenue for enhancing size and strength.
“The memorandum of agreement [MOA] recently signed by the country’s financial regulators provides an efficient mechanism for banks to pursue MCAs,” the governor said.
Last November 5, officials from the BSP, Philippine Deposit Insurance Corp., Securities and Exchange Commission, Cooperative Development Authority and Philippine Competition Commission signed a MOA to process bank MCAs within 55 business days.
The agencies are expected to issue implementing guidelines within 60 business days from the signing of the MOA. The BSP said the guidelines will be issued through a joint circular.