RB white knights to get fee waiver

Manila, Philippines -  The Bangko Sentral ng Pilipinas (BSP) has decided to waive the branch licensing fees ranging between P15 million and P20 million per branch to strategic investors or “white knights” of ailing and troubled rural banks.

BSP deputy governor Nestor Espenilla Jr. told members of the Rural Bankers’ Association of the Philippines (RBAP) that the enhanced incentive would be part of the Strengthening Program for Rural Banks Plus (SPRB Plus) that would be in effect until next year.

“Apart from this, incentives to white knights have also been expanded such as waiver of branch licensing fees to the extent of capital infused, among others,” Espenilla stressed.

If the “white knight” is a rural bank, he pointed out that branches could be established up to the same number of the branches of the acquired bank with the theoretical capital and processing fee waived.

He explained that new components and elements of the SPRB Plus are a result of some of the lessons learned from the first phase.

Last May 16, the BSP and the state-run Philippine Deposit Insurance Corp. (PDIC) approved the enhanced and extended version of a P5-billion program dubbed as SPRB Plus aimed at strengthening the country’s rural banking industry for faster consolidation in the banking industry through mergers and acquisition.

The expanded version allows offering incentives to commercial banks and well-managed thrift banks intending to acquire ailing rural banks.

The SPRB Plus now includes strong and well-managed commercial banks and thrift banks as among eligible Strategic Third Party Investor (STPI) or so-called “white knights” that would be entitled to incentives when investing in problematic country-side based banks.

In the original SPRB that is scheduled to expire in August this year, only strong rural banks were allowed to act as white knights of other rural banks and with a more limited incentive package.

SPRB Plus offers a variety of financial and regulatory relief and incentives to improve the prospects for success of new banking partnerships. It would take effect until end next year.

Under the enhanced program, PDIC could extend financial assistance to augment capital shortfalls and attract new investors while the BSP has also put on the table an expanded package of regulatory relief and branching incentives for commercial, thrift, and rural bank that step forward as “white knights.”

The SPRB Plus expects eligible “white knights” not only to sustain and strengthen the financial condition of resulting banks but also to improve their quality of corporate governance and management.