SEC okays mergers of UCPB’s savings and rural bank units

The merger of the savings and rural bank units of the United Coconut Planters Bank (UCPB) will soon take place following the approval by the Securities and Exchange Commission (SEC) of UCPB Savings Bank’s application for an increase in its capital stock.

The SEC recently approved the increase in UCPB Savings’ authorized capital stock from P400 million to P800 million, paving the way for its merger with UCPB Rural Bank with the former as the surviving entity.

The merger of the two units forms part of the rehabilitation plan submitted by UCPB to the Philippine Deposit Insurance Corp.

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

The merger is expected to create efficiencies and synergy that will reinforce UCPB Savings’ competitive position and revenue generation capability.

UCPB Savings is strong in deposit generation, mortgage banking and lending to small and medium size enterprises while UCPB Rural Bank is the acknowledged leader in salary loans in its service areas and highly experienced in the micro-finance 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 for the new savings bank.

The merged entity has a combined net income of P98.4 million in the nine months ending September 2005.

At the end of 2005, the two banks are projected to post earnings of P122 million, total deposits of P2.08 billion and total loans of P2.05 billion.