Mindanao's biggest bank expands with 5 micro banking offices in Davao

MANILA, Philippines - The One Network Bank Inc. (A Rural Bank), or ONB, will be opening five micro-banking offices (MBO) in the greater Davao City area within the next few months.

Last month, the Bangko Sentral ng Pilipinas (BSP) approved the ONB request for five MBOs in Davao City “pursuant to BSP Circular No. 694 dated Oct. 14, 2010.”

The five MBOs will be located in Brgy. Catalunan Grande, Brgy. Cabantian, Brgy. Bunawan, Brgy. Sasa and Piapi (to be replaced by another location in Sandawa), all within Davao City.

The total estimated capital expenditure (capex) for the five units is P4.17 million or roughly P834,000 each. This represents cost of leasehold improvements, furniture and equipment on a rented five meters by six meters commercial stall space.

Over the first three years of operation, each MBO is projected to contribute an additional average annual operating income of over P500,000, or P2.67-million total income for the five MBOs over three years.

Each MBO will be as technologically enhanced as regular branches with automated teller machine (ATM), point-of-sale (POS), debit bills payments, electronic foreign remittance, online interbranch PeraDala cash transfers, and Internet banking.

”The only limitation for each MBO is that only micro deposits of not more than P15,000 and only micro loans of not more than 150,000 are allowed by BSP to be serviced by MBOs,” ONB president and chief executive officer Alex V. Buenaventura said in an earlier interview.

Under BSP Circular 694, rural and thrift banks are allowed to establish micro-banking offices (MBOs) in cities and municipalities where microfinance-oriented banking services are unavailable, and where it is economically unjustifiable to set up large-scale bank services.

The MBOs provide services such as micro-deposits, check deposits of microfinance clients for collection and credit to own deposit accounts, disburse/release proceeds of micro-loans and collect loan amortization payments and related charges, collect payments, sell and market micro-insurance products, receive and pay out authorized remittance transactions, act as cash in/out points for electronic money, receive utility payments, collect premiums, and pay out benefits, and purchase foreign currencies up to the maximum equivalent of $300 per client per day for credit to micro-deposit accounts.

“MBOs will allow ONB to expand its banking infrastructure to reach microfinance clients in growth barangays within (Davao) City that are unserved by banks. Inclusive banking is the general strategy,” Buenaventura added.

Recently, ONB inaugurated its 81st branch in New Corella, Davao Del Norte, which is actually a product of its recent consolidation with the Rural Bank of New Corella.

After consolidation, total resources stood at P12.28 billion, stockholders’ equity (networth) valued at P2.17 billion, and risk-based capital adequacy ratio (CAR) stood at 22 percent.