UCPB Savings to double capital to P800M

UCPB Savings Bank, the savings unit of the United Coconut Planters Bank, is doubling its capitalization to P800 million to facilitate its merger with UCPB Rural Bank.

The merger of the two UCPB units forms part of the rehabilitation plan submitted by UCPB to the Philippine Deposit Insurance Corp. UCPB Savings, the surviving entity, would serve as the vehicle for the parent bank’s consumer banking operations.

After the merger, UCPB Savings will have a subscribed and paid-up capital stock of P722.76 million and total assets of P3.7 billion.

UPCB officials said the merger will result in efficiencies and synergy that will reinforce UCPB Savings’ competitive position and revenue generation capability.

UCPB Savings is a strong player in deposit generation, mortgage banking and lending to small and medium-sized enterprises while UCPB Rural Bank is the acknowledged leader in salary loans in its service areas and highly experienced in the microfinance business.

UCPB’s rural bank has a total of 16 branches, mostly in the Visayas and Mindanao, while the savings bank has 18 branches, mainly in Southern Luzon and Metro Manila, for a total of 34 branches.

UCPB Savings and UCPB Rural Bank earned a combined P98.4 million during the first nine months of 2005. The two banks are projected to post a profit of P122 million, total deposits of P2.08 billion and total loans of P2.05 billion in 2005.

UCPB Savings is expected to start feeling the beneficial impact of the merger this year with deposits projected to grow nine percent to P2.27 billion, loans by 36 percent to P2.79 billion, and net income by 45 percent to P177 million at yearend. By 2008, the merged bank’s total deposits and total loans will hit P3.43 billion and P3.32 billion, respectively, while net income will rise to P255 million.