Agencies to speed up, simplify M & A process
THE BANGKO SENTRAL NG PILIPinas has signed a memorandum of agreement with Philippine Deposit Insurance Corp. to speed the process of approving mergers and acquisitions among the banking industry.
This was in anticipation of an increase in the number of banks—both commercial and rural—that are going to merge in the near term.
“We are seeing more mergers, especially at the level of small banks. In terms of commercial banks, there might also be some mergers in the horizon,” BSP Deputy Governor Nestor Espenilla Jr. told reporters after the MOA signing held yesterday at the central bank’s headquarters in Manila.
Espenilla, who heads the BSP’s bank supervision unit, however, declined to disclose which banks were planning to merge besides Lucio Tan-owned banks Philippine National Bank and Allied Bank.
PNB and Allied Bank have announced plans to merge. The plan has been approved by their stockholders last year, but is now being hampered by a regulatory requirement slapped by the US Federal Reserve.
The US Fed said Allied Bank should first dispose of its 28-percent stake in Oceanic Bank, which is based in California, before it could merge with another entity. Allied is having a difficult time looking for investors because of the risk aversion caused by the US financial sector meltdown.
The MOA signing was attended by PDIC president Jose Nograles and some BSP officers.
Prior to the signing, banks that intend to merge have to get approval first from the PDIC and then from the BSP. With the MOA, Espenilla said, the BSP and PDIC can already observe a simultaneous approval process to hasten mergers and acquisitions.
“With the MOA, there will be parallel processing of application of mergers or acquisitions, thereby hastening the process,” Espenilla said.
The MOA will allow banks to get approval of their merger applications within six months, Espenilla said. Earlier, it takes much more time for banks to get the nods of the BSP and PDIC.
In the meantime, the BSP signed another MOA with the Securities and Exchange Commission and the Insurance Commission.
This pertains to the adoption by the three agencies of a uniform process in the accreditation of external auditors. –Michelle Remo, Philippine Daily Inquirer
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