RCBC merges 2 units to focus on microfinance

MANILA, Philippines - Rizal Commercial and Banking Corp. (RCBC) is merging its subsidiaries Rizal Microbank and Pres. JP Laurel Rural Bank, with the former as the surviving entity.

Rizal Microbank is a thrift bank, formerly named the Merchant Savings and Loan Association Inc., acquired by RCBC in 2008. Pres. JP Laurel Rural Bank was taken in the following year.

“We decided to merge the two banks to take advantage of the flexibility of the thrift bank license and the expertise in micro-lending of the rural bank,” RCBC senior vice president and head of microfinance operations Ma. Lourdes Jocelyn S. Pineda said.

The merged banks’ emphasis will be microlending, or lending to individuals or businesses of less than P5 million. The amount represents the maximum lending figure for microfinance, small and medium enterprises (MSME).

The new Rizal Microbank will have total resources worth P1.2 billion and a combined branch network of 18 (eight from Merchant Savings and 10 from JP Laurel). Pineda said the target is to reach 30 branches by 2014.

Rizal Microbank will concentrate in Southern Mindanao, including Davao, and the Calabarzon (Cavite, Laguna, Batangas, Rizal, Quezon) area.

Pineda said the new bank would be fully operational by the first quarter of 2012.

Aside from Rizal Microbank, the Yuchengco Group also owns RCBC Saving Bank that has 118 branches and 151 ATMs.

The RCBC official said the bank would hire more employees rather than expand with more branches. Other banking offices (OBO) will also be the preferred mode of expansion, which fits with the requirements and characteristics of microfinance.

OBOs are physical extension of a bank or a bank branch empowered with banking services. An OBO is ideal for microfinance operations as it can serve as a deposit-taking outlet, and headquarters of microfinance personnel of the bank. Microfinance requires a large number of field personnel tapping borrowers and collecting payments on a daily, weekly or monthly basis.