China Bank acquires Pampanga rural bank

MANILA, Philippines - China Banking Corp. has acquired Unity Bank, a rural bank based in San Fernando, Pampanga, for an undisclosed amount, industry services said.

Unity Bank has 15 operating branches mostly located in the key provinces of Central Luzon.

Sources likewise revealed that all the necessary regulatory requirements have been applied and obtained from the Securities and Exchange Commission (SEC) and the Bangko Sentral ng Pilipinas (BSP).

“It is a done deal,” the same sources said, adding that they expect a formal announcement within the week.

China Bank, a member of the SM Group of Companies, has Hans T. Sy as board chairman and Peter S. Dee as president. Retail tycoon Henry Sy Sr. the country’s richest man, is the honorary chairman.

On the other hand, Unity Bank, headed by its president Vic Ignacio, is a member of the Rural Bankers Association of the Philippines (RBAP) and the Central Luzon Confederation of Rural Bankers.

Bank sources added that China Bank had likewise applied for incentives outlined in the Strengthening Program for Rural Banks Plus (SPRB Plus), a program that encourages rural, thrift, commercial banks and even non-bank corporations to acquire rural banks.

Under the SPRB Plus program, certain incentives including branch licenses will be provided by the BSP.

The SPRB Plus aims to strengthen the thrift and rural banking industry to improve the delivery of financial services that will help sustain countryside development. The program, however, will lapse in end-2013.

“That (SPRB incentives) will give China Bank a considerable number of branch licenses,” the sources said.

China Bank currently has nearly 300 branches and is on aggressive expansion towards Southern Philippines. The commercial bank’s target is to hit 400 branches by 2014.

Its thrift unit, China Bank Saving, has 24 branches spread out nationwide, majority of which are located in restricted areas and areas just outside Metro Manila. Its target is to hit 100 branches by 2014.