BSP oks consolidation of 6 coop banks

MANILA, Philippines – The Monetary Board of the Bangko Sentral ng Pilipinas (BSP) approved Wednesday, October 9 the consolidation of 6 cooperative banks as part of efforts to strengthen their sector.

The banks include the Cooperative Bank of Agusan del Sur, Capiz Settlers Cooperative Rural Bank Inc., Cooperative Bank of Camarines Norte, Cooperative Bank of Leyte, Sorsogon Provincial Cooperative Bank and Southern Leyte Cooperative Bank.

BSP said the entity resulting from the consolidation will be named Network Consolidated Cooperative Bank (NCCB). It will get a capital infusion from the National Confederation of Cooperatives, BSP added.

“The operation of NCCB will start upon issuance of authorizations from BSP and the Cooperative Development Authority,” noted the central bank. “The consolidation will create a larger and stronger financial institution with a wider market as a result of synergy, cost savings and competitive advantage.”

The move is part of efforts to consolidate the cooperative banking sector and increase its ability to absorb losses.

BSP, state insurer Philippine Deposit Insurance Corporation and state-owned Land Bank of the Philippines are pushing for the consolidation through an incentive program they launched earlier.

Under the Strengthening Program for Cooperative Banks (SPCB), banks that will merge or consolidate will be given financial aid such as capital infusions and loans.

BSP approved recently an improved version of the program called SPCB Plus, which aims “to expand the coverage and increase the participation of strategic third-party investors in the program and fast-track industry consolidation.”

The central bank said it expects other cooperative banks in the country to merge or consolidate under SPCB Plus. – Rappler.com