The Bangko Sentral ng Pilipinas (BSP) and the Philippine Deposit Insurance Corporation (PDIC) have approved the extension of the Strengthening Program for Rural Banks (SPRB) Plus from 31 December 2014 to 31 December 2015 with certain operational refinements, in response to the clamor of banking industry associations for the program’s extension to accord opportunity and encourage more mergers, consolidations and acquisition of eligible rural banks (RBs) and thrift banks (TBs) by strategic third party investors (STPIs).
The SPRB Plus, which is a joint project of the BSP and the PDIC, is an enhanced version of the original SPRB which was launched in 2010 exclusively for rural banks (RBs). In furtherance of the objectives of SPRB Module I and to promote participation under the Program, its scope was broadened and enhancements were made under the SPRB Plus such as inclusion of TBs, in addition to RBs, as among the eligible banks as well as the inclusion of TBs, universal and commercial banks (UKBs), non-bank corporations and group of companies as eligible STPIs.
With the exception of STPI UKBs and banking groups which can only avail of incentives from the BSP without the financial assistance component, all other eligible STPIs, including non-bank corporations which are not subsidiaries of UKBs, may avail of both the FA and the incentives consisting of regulatory reliefs and branching/other incentives.
The SPRB Plus aims to strengthen the banking system and to minimize bank closures.
As of 18 December 2014, seven (7) merger/consolidation applications involving fourteen (14) banks have been approved by the BSP and PDIC. In addition, four (4) STPI banks were granted branching incentives, without the FA component from the PDIC, for their acquisition of eligible banks. Moreover, there are two (2) other applications for acquisition that are currently being processed.
“With this extension, we expect to receive more proposals. We urge the industry to avail of this limited opportunity. Considering the much stronger condition of the banking system today, this may be the last extension,” BSP Governor Amando M. Tetangco, Jr. said.