The Monetary Board the policy-making body of the Bangko Sentral ng Pilipinas (BSP), approved in principle last week the merger between Bank of Commerce (BOC) and Traders Royal Bank, bank officials disclosed yesterday.
"It was approved last week. But we are still on the look for others banks. The acquisition of Traders Royal Bank will not be the last," a BOC official said. The merger, expected to be finalized in the next few weeks, will increase BOC's resources to P25 billion and its deposit to P16 billion.
The BOC, he said will be the surviving entity. He refused to say, however, how the merger would be effected whether through a share swap or payment in cash.
The merger, the official said would help BOC strengthen its presence in the Visayas where Traders Royal Bank has a strong presence. He said most of the bank's branches were also located in this region.
While BOC has been focused on medium-sized industries and some corporate clients, the bank official said Traders Bank has been strong in the countryside. The merged bank would have a network of 97 branches.
The bank, he said recently approved an increase in BOC's authorized capital to P5 billion to implement various expansion projects including the establishment of more branches, automation of its system, and the creation of more ATMs.
The acquisition of Traders Royal Bank, he said is in line with BOC's strategy to expand its presence in the industry.
The BSP has been encouraging a consolidation among the country's 53 commercial banks through a gradual rise in the capital requirement which would end December this year. The mergers and acquisition is expected to strengthen banks and enable them to withstand difficulties similar to the Asian currency crisis in July 1997.
As of the first quarter, BOC is the 19th biggest bank in terms of capital and the 26th in terms of resources.