Consolidation,
Of the 52 applications, 20 transactions involving mergers, consolidations and acquisitions (MCAs) were approved, which involved 93 banks and nine nonbank financial institutions. Of the 20, eight have fully implemented the MCAs, of which 21 rural banks were involved.
One of the universal banks that took up the opportunity opened by the regulatory relief measures was East West Banking Corp. when it acquired Butuan City-based Green Bank, Inc. in 2011 and Pasig City-based FinMan Rural Bank, Inc. in 2012. The two banks would later be merged to what is now EastWest Rural Bank, Inc.
“When we acquired the two rural banks, it was not really about changes in the environment or regulations. It was really more about the opportunity we saw to get into some segments of the market,” said EastWest Bank President and CEO Antonio C. Moncupa, Jr.
“We were looking into micro lending and other programs that are better suited for rural banks than in a universal bank context.”
Asked the how the acquisitions would play out in the bank’s business plan, Mr. Moncupa said rural banks could be dedicated to serving certain market segments, such as small businesses, farmers or specific communities.
“[I]t may make sense for a rural bank to serve smaller communities than universal banks. Sometimes, it is for synergies,” he said.
“In the case of EastWest, we now have presence in smaller towns and giving smaller loans because we have EastWest Rural Bank who could really focus on doing these defined activities better.”