MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) has given the green light for the merger of three cooperative banks in Mindanao as part of the efforts of the bank regulator to support the development of a stronger cooperative banking sector in the country.
The BSP approved the consolidation of the First Community Cooperative Bank of Misamis Occidental, Cooperative Bank of Davao del Sur, and Cooperative Bank of Surigao del Sur last Feb. 16.
The three merged banks is owned and controlled by First Community Cooperative – a primary cooperative based in Cagayan de Oro City.
The new entity would be called Consolidated Cooperative Bank and would assume all the assets and liabilities of the three constituent cooperative banks.
“The plan of consolidation was a collective agreement of the common shareholders of the three banks in their desire to strengthen the financial position and operating efficiency of their respective cooperative banks with the intent to become a relevant player in the socio-economic development of Mindanao,” the BSP said.
Late last year, the BSP together with state-run Philippine Deposit Insurance Corp. (PDIC) launched a coordinated incentive program known as the Special Program for Cooperative Banks (SPCB) to support the development of a stronger cooperative banking sector in the Philippines.
The BSP is actively promoting mergers, consolidations and acquisitions of cooperative banks as a means to promote larger and stronger institutions whose more solid capital position and wider branch network would enable them to deepen their reach in the countryside.
The program would also spur lending activities in the unbanked and the underserved areas, and eventually uplift the economic condition of the people residing in these communities.
As part of the incentives, Consolidated Cooperative Bank would be allowed to establish branches or offices in major cities and towns of Mindanao.
After its launching, the program immediately lured Rabobank Group of Netherlands and DGRV - Deutscher Genossenschafts- und Raiffeisenverband E. V. of Germany that have expressed strong interest in venturing into the local cooperative banking industry either through technical assistance or financial assistance.
Data from the BSP showed that there are 40 operating cooperative banks in the country with resources aggregating P16.4 billion as of end-September last year.