MANILA, Philippines - The Philippine Deposit Insurance Corp. (PDIC) has set up an investor-investee help desk to provide a market place for buyers and sellers of banks.
“It is a market place managed by a third party entity that collates vital information and ideas for buyers and sellers,” said Aurelio R. Montinola III, president of the Bankers Association of the Philippines (BAP) and the Bank of the Philippine Islands (BPI), describing PDIC’s latest initiative to facilitate the consolidation of the country’s banking industry.
Pascual M. Garcia III, president of the Chamber of Thrift Banks (CTB) and the Philippine Savings Bank, added that the help desk will facilitate the tedious process of consolidation by matching buyers and sellers.
“There will definitely be thrift banks that will list with the help desk. Some thrift banks are still looking for an acquisition, whether it is a rural bank or another thrift bank,” he said.
He said several major thrift banks have already increased their capital base in preparation for expansion and acquisitions.
Joseph Omar Andaya, president of the Rural Bankers Association of the Philippines (RBAP), pointed out that banks have been forced to increase capital due to several domestic as well as international banking standards.
The Basel II international framework for financial institutions effectively forces banks to increase capital base to mitigate risks. Locally, the commercial banking system and the thrift banking system have already started to fully implement these standards.
Rural banks have until 2012 to fully implement all risk-mitigating measures.
“There are a lot of rural banks that will sell due to stiff requirements on risk and capital requirements,” said Andaya, who is also president of Green Bank.