Thrift lender merges with Leyte rural bank

THE MERGER between thrift lender Producers Savings Bank Corp. and the Rural Bank of Maasin, Inc. in Southern Leyte has been approved by the corporate regulator, the Bangko Sentral ng Pilipinas (BSP) said.

“The Securities and Exchange Commission approved on April 1, 2024 the articles and plan of merger executed on July 3, 2023,” it said in a circular letter.

All assets and liabilities of Rural Bank of Maasin will be transferred and absorbed by Producers Savings Bank, which will be the surviving entity.

The merger took effect on April 1, the BSP added.

Producers Savings Bank is a thrift lender that aims to become the “partner bank of farmers and small and medium-sized enterprises in producing more wealth in the country,” according to its website.

The thrift bank operates in 14 regions and has branches in 50 provinces.

Its most recent acquisitions were made in 2021, which were Bangko Carrascal, Inc.; Philippine Bank of Communications Rural Bank; Rural Bank of Peoples Bank of Caraga, Inc.; and Rural Bank of San Quintin, Inc. in Pangasinan.

The central bank is encouraging rural lenders to consolidate to ensure the “troubled” sector is well capitalized, BSP Governor Eli M. Remolona, Jr. said last month.

In September, the BSP raised the minimum capital requirement for rural banks to at least P50 million as it seeks to further strengthen the local banking industry.

Under the new rules, a rural bank with a head office and up to five branches needs to have a minimum capitalization of P50 million, regardless of location. Rural banks with six to 10 branches are required to have a minimum capital of P120 million, while those with more than 10 branches should have capital of at least P200 million.

The capital rules form part of initiatives under the central bank’s Rural Bank Strengthening Program, which aims to enhance the operations, capacity, and competitiveness of the sector. The program is set to run until March 2025. — L.M.J.C. Jocson