Merger is the absorption of one or more corporations by another existing corporation, which retains its

identity and takes over the rights, privileges, franchises, and properties, and assumes all the liabilities and
obligations of the absorbed corporation(s) in the same manner as if it had itself, incurred such liabilities or
obligations. The absorbing corporation continues its existence while the life or lives of the other
corporation(s) is/are terminated.

Consolidation is the union of two (2) or more corporations into a single new corporation, called the
consolidated corporation, all the constituent corporations thereby ceasing to exist as separate entities. The
consolidated corporation shall thereupon and thereafter possess all the rights, privileges, immunities,
franchises and properties, and assume all the liabilities and obligations of each of the constituent
corporations in the same manner as if it had itself incurred such liabilities or obligations.

On 19 April 2000, the Monetary Board approved the issuance of Circular No. 237, consolidating and
clarifying all existing rules and regulations on mergers and consolidations of banks and other financial
institutions (Section X112 of the Manual of Regulations for Banks and Section 4112Q of the Manual of
Regulations for Non-bank Financial Institutions), as well as improving the incentive package. This was done
to foster healthy competition between and among banks, bring about more and better financial services at
lower cost, and promote stability and efficiency in the Philippine banking sector.

Reference: http://www.bsp.gov.ph/publications/regular_status_1s00.asp

List of merged and consolidated banks in the Philippines:

(PAKI CHECK NALANG YUNG MGA DOBLE… IF MERON MAN… ILALAGAY SA PPT PERO ANG
SASABIHIN LANG MOSTLY YUNG KILALANG AT BIGATIN NA BANKS)

 Acme Savings Bank (acquired by the Sy Group of Companies and renamed Banco De Oro)
 Bank of Cebu
 International Exchange Bank (acquired by Union Bank of the Philippines)
 Insular Bank of Asia and America (merged with Philippine Commercial International Bank)
 Mindanao Development Bank (merged with Equitable PCI Bank)
 Ecology Bank (merged with Equitable PCI Bank)
 Family Savings Bank (acquired by BPI; renamed to BPI Family Savings Bank)
 AIG Philam Savings Bank (merged with East West Banking Corporation)
 Keppel Bank (acquired by GE Capital Finance)
 Equitable PCI Bank (merged with PCI Bank forming it and now merged with Banco de Oro)
 Philippine Commercial International Bank (merged with Equitable PCI Bank and now merged with
Banco De Oro)
 Urban Bank (forced to close then merged with Export and Industry Bank)
 Allied Bank (merged with Philippine National Bank)
 Capitol Development Bank (acquired by RCBC and became RCBC Savings Bank)
 Banco Filipino
 Export and Industry Bank
 American Express Bank (renamed BDO Elite Savings Bank)
 Banco Santander Central Hispano (Philippine subsidiary acquired by Banco De Oro and renamed BDO
Private Bank)
 Dao Heng Bank (acquired by Banco de Oro)
 1st E Bank (Philippine Branches acquired by Banco de Oro)
 United Overseas Bank (66 out of 67 Branches merged with Banco de Oro)
 GE Money Bank (acquired by Banco de Oro)
 Green Bank of CARAGA (acquired by EastWest Banking Corporation alongside FinMan Rural Bank,
Inc. in 2013 and became EastWest Rural Bank, Inc.)
 Orient Commercial Banking Corporation (forced to close; Allied Bank took over 52 branches)
 Standard Chartered Bank Philippines (Philippine retail banking business was acquired by East West
Banking Corporation in 2016)
 Philippine Resources Savings Bank (PR Savings Bank; acquired by CitySavings Bank in 2018)

Reference: https://en.wikipedia.org/wiki/List_of_banks_in_the_Philippines

 The acquisition of Philippine Postal Savings Bank (PPSB) by Land Bank of the
Philippines (Landbank) and conversion into Overseas Filipino Bank (OFB) was ordered by President
Rodrigo Duterte through Executive Order No. 44, dated September 28, 2017.
The Philippine Postal Corp., parent company of PPSB, and the Bureau of the Treasury were ordered
to transfer their shares in PPSB to Landbank at zero value.
The main office of Overseas Filipino Bank at the Postal Center in Manila had its ceremonial opening by
Pres. Duterte on January 17, 2018.
 Banco Dipolog, Inc. A Rural Bank was the surviving bank after its merger with Rural Bank of
Nagcarlan, Inc. and Rural Bank of Kabasalan (Zamboanga del Sur), Inc. on December 11, 2017.
 Dumaguete City Development Bank, Inc. (DCDB) has merged with Rural Bank of Sibulan (Negros
Oriental), Inc., with DCDB as the surviving bank. Approved by the SEC on April 4, 2017.
 BPI Direct Savings Bank Inc. has merged to form BPI Direct BanKO Inc., A Savings Bank. Effective
date of merger was December 29, 2016.
 The proposed merger between state-owned banks Landbank and Development Bank of the
Philippines (DBP) was approved by President Aquino on February 4, 2016 through Executive Order
No. 198. The merger is subject to approval by the BSP, according to BSP Deputy Governor Nestor
Espenilla Jr.
 Producers Savings Bank Corp. has acquired Rural Bank of Cainta Inc. Approved by the SEC on
December 29, 2015. Producers Savings Bank started operating as a merged bank on December 29,
2015.
 China Savings Bank has acquired Planters Development Bank on December 17, 2015. Approved
by the SEC on December 17, 2015. Announced in a circular by the BSP on February 10, 2016.
 Philippine Business Bank, one of the country's biggest savings banks, has acquired Insular Savers
Bank Inc., the rural bank that arose from the merger of Insular Rural Bank Inc. and Filipino Savers
Bank Inc. (A Rural Bank). Acquisition completed on June 30, 2015. With Insular's 8 branches, the
acquisition increased PBB's total number of branches to 134.
 Insular Rural Bank Inc. and Filipino Savers Bank Inc. (A Rural Bank) have merged to become a
consolidated rural bank named Insular Savers Bank Inc. (A Rural Bank). Insular Savers started
operating as a rural bank on June 1, 2015.
 Rural Bank of Tanza (Cavite), Inc., also known as Bangko Mabuhay, and the Rural Bank of Teresa
(Rizal), Inc. merged to form a new rural bank named Bangko Mabuhay (A Rural Bank), Inc. Merger
was approved by the BSP on March 23, 2015. Bangko Mabuhay started operating as a consolidated
rural bank on April 1, 2015.
 BDO Unibank has signed an agreement to acquire One Network Bank Inc., the largest rural bank in
Mindanao, subject to closing conditions and regulatory approvals. (December 2014)
 China Banking Corp. is set to complete its acquisition of Planters Development Bank in August
2014. Acquisition plan approved by the BSP in December 2013.
 Network Consolidated Cooperative Bank was formed from the consolidation of these 6 cooperative
banks on September 8, 2014: Cooperative Bank of Agusan del Sur, Capiz Settlers Cooperative
Rural Bank, Inc., Cooperative Bank of Camarines Norte, Cooperative Bank of Leyte, Sorsogon
Provincial Cooperative, and Southern Leyte Cooperative Bank. (Source: Status Report on the
Philippine Financial System, Dec 2014)
 BDO Unibank signed a deal to acquire The Real Bank (A Thrift Bank) in June 2014.
Acquisition completed in August 2014 (Status Report, Dec 2014).
 Bridge Philippines Investments has acquired a 34-percent equity in 1st Valley Bank, a rural bank
headquartered in Lanao del Norte that became a thrift bank in August 2013. Bridge Philippines is
incorporated in Singapore.
 Philippine Bank of Communications (PBCOM) has signed an agreement in March 2014 to buy a
controlling stake in Banco Dipolog, which has 13 branches in Northern Zamboanga.
 Philippine Bank of Communications (PBCOM) has acquired Rural Bank of Nagcarlan in March
2014. The rural bank has 6 branches, which are in Nagcarlan, Binan, Cabuyao, Calamba, Los Banos
and San Pablo. Acquisition has been approved by the BSP.
 BDO Unibank acquired Citibank Savings Bank in March 2014.
Acquired Citibank Savings Bank will be renamed Banco de Oro Savings Bank.
 East West Banking Corp. acquired Green Bank A Rural Bank.
Merger approved by the SEC on June 5, 2014; effective July 31, 2014
 China Bank Savings Inc. acquired Unity Bank, A Rural Bank Inc.
Merger approved by the SEC on January 20, 2014; announced by the BSP on February 12, 2014.
 Bank of Florida Inc., A Rural Bank and Bank of Lubao Inc., A Rural Bank, merged to operate under
the name BOF Inc., A Rural Bank. (Effective January 2, 2014, BSP)
 Malaysian firm Duclos SDN BHD invested in Palawan Bank (Palawan DB), Inc. (24.6 common
shares and 100 preferred shares) (Status Report, Dec 2014)
 American investors Eleazar B. Sagun and Rizal C. Suelen invested in Malasiqui Progressive
SLB (27.7 common shares)
 Singapore-incorporated Bridge Philippines Investments invested in Sugbuanon Rural Bank,
Inc. (40.0 common shares)
 Producers Savings Bank Corp. acquired Iloilo City Development Bank.
Merger approved by the SEC on October 31, 2013; announced by the BSP on November 18, 2013.
 One Network Bank Inc. (A Rural Bank) acquired Rural Bank of San Enrique (Iloilo) Inc., doing
business as Banco San Enrique (A Rural Bank).
Merger approved by the SEC on April 12, 2013; effective May 16, 2013; announced by the BSP on
May 17, 2013
 Philippine National Bank (PNB) acquired Allied Banking Corp., with the merger taking effect on
February 9, 2013.
 First Community Cooperative Bank of Misamis Occidental, Cooperative Bank of Davao del
Sur and Cooperative Bank of Surigao del Sur were consolidated to become Consolidated
Cooperative Bank. Consolidation approved by the Cooperative Development Authority on September
26, 2012 and announced by the BSP on January 14, 2013.
 Country Rural Bank of Taguig Inc. and Builders Rural Bank Inc. consolidated into Country
Builders Bank Inc. (A Rural Bank) on November 5, 2012.
 Producers Savings Bank Corp. consolidated with New Rural Bank of Victorias Inc. and started
operating as a consolidated thrift bank on October 12, 2012.
 Asia United Bank Corp. established Cavite United Rural Bank Corp.to acquire Cooperative Bank
of Cavite. Acquisition approved by the BSP on September 6, 2012
 BDO Unibank Inc. (BDO) completed its acquisition of the Rural Bank of San Juan Inc., formerly
known as Banco San Juan, on July 24, 2012.
 Valiant Rural Bank (Iloilo City) Inc. and Rural Bank of Sapian (Capiz) Inc. consolidated into Valiant
Bank Inc. (A Rural Bank), which started operating as a consolidated thrift bank on May 2, 2012.
 Robinsons Bank Corp. completed its acquisition of Legazpi Savings Bank on December 26, 2012,
as announced on legazpibank.com.ph. Legazpi Savings Bank is now a wholly-owned thrift
subsidiary of Robinsons Bank.

Reference: https://www.banksphilippines.com/2014/08/bank-mergers-in-philippines-2014-2013.html
Reason/s why banks merged and consolidate with other banks

Many banks see an acquisition or merger as a chance to expand their reach or scale up
operations quicker. Yet, a bank acquisition is not without its drawbacks as well – particularly for the
unprepared banking executive.
Mergers and acquisitions (consolidation) take place for many strategic business reasons, but the
most common reasons for any business combination are economic at their core. Following are some of
the various economic reasons:
 Increasing capabilities: Increased capabilities may come from expanded research and
development opportunities or more robust manufacturing operations (or any range of core
competencies a company wants to increase). Capability may not just be a particular department;
the capability may come from acquiring a unique technology platform rather than trying to build it.
 Gaining a competitive advantage or larger market share: Companies may decide to merge
into order to gain a better distribution or marketing network. A company may want to expand into
different markets where a similar company is already operating rather than start from ground
zero, and so the company may just merge with the other company.
 Diversifying products or services: Another reason for merging companies is to complement a
current product or service. Two firms may be able to combine their products or services to gain a
competitive edge over others in the marketplace.
 Replacing leadership: In a private company, the company may need to merge or be acquired if
the current owners can’t identify someone within the company to succeed them. The owners may
also wish to cash out to invest their money in something else, such as retirement.
 Cutting costs: When two companies have similar products or services, combining can create a
large opportunity to reduce costs. When companies merge, frequently they have an opportunity to
combine locations or reduce operating costs by integrating and streamlining support functions.
This economic strategy has to do with economies of scale: When the total cost of production of
services or products is lowered as the volume increases, the company therefore maximizes total
profits.
 Surviving: It’s never easy for a company to willingly give up its identity to another company, but
sometimes it is the only option in order for the company to survive. During the financial crisis,
many banks merged in order to deleverage failing balance sheets that otherwise may have put
them out of business.

Mergers and acquisitions occur for other reasons, too, but these are some of the most common.
Frequently, companies have multiple reasons for combining.

Services offered pero sa atin incentives?? Paki kuha yung pinaka highlight lang…

Incentives for merging or consolidating financial institutions included, among others, the following:

 The revaluation of bank premises, improvements and bank equipment of the institution, provided
that such revaluation shall be based on fair valuation of the property conducted by a reputable
appraisal company which shall be subject to review and approval by the BSP;
 Staggered booking of unbooked valuation reserves based upon the BSP examination and other
capital adjustments resulting from the merger or consolidation over a maximum period of five (5)
year;
 The temporary relief from full compliance with the prescribed net worth to risk assets ratio by the
resulting bank, at the discretion of the Monetary Board, subject to certain conditions which the
Monetary Board may prescribe;
 Amortization of goodwill up to a maximum period of 40 years, if warranted;
 Installment payment of outstanding penalties on legal reserve deficiencies and interest on
overdrafts with the BSP as of the date of merger or consolidation over a period of one (1) year;
  The rediscounting of up to an amount equivalent to 150% of adjusted capital accounts for a period
of one (1) year, reckoned from the date of merger or consolidation provided the
merged/consolidated bank meets the required net worth to risk assets ratio and all of the other
requirements for rediscounting;
 The possible grant to commercial banks, whose outstanding real estate loans exceed 20% of total
loan portfolio, a one-year grace period within which to comply with the prescribed 20% ratio
reckoned from the date of merger or consolidation;
 The restructuring/plan of payment of past due obligations of the proponents with the Bangko Sentral
as of the date of merger/consolidation over a period not exceeding ten (10) years;
 In the case of rural banks, the grant of access to the BSP rediscounting window for a period of two
(2) years from the date of merger or consolidation even if its past due ratio exceeds 25% of loan
portfolio but not exceeding 30%, provided the merged/consolidated bank meets all other
requirements (During the 2-year period, its rediscounting limit per application may be increased to
an amount equivalent to the total rediscounting limit per application of each of the constituent banks
before merger or consolidation.);
 Subject to the approval of the Monetary Board, allowing (a) concurrent officerships between a
merged or consolidated bank/financial institution and another bank/financial institution; and (b)
concurrent directorships in cases where a bank acquires shares of stock of another bank for the
purpose of merging or consolidating the two (2) banks regardless of whether the banks belong to
the same category or both have quasi-banking functions;
 Subject to other requirements on the establishment of branches, possible grant of authority for the
establishment of branches by the merged or consolidated rural bank in the cities of Cebu and
Davao, if same has put up the minimum capital requirements for these places; and
 The grant of automatic extension of five (5) years for retirement of government preferred shares to
be reckoned from the date of merger/consolidation.

Comparison with other banks

helpppp

Roles/ Contributions to the Implementation of the monetary policies and economic growth

Merger and consolidation was a major theme of the Philippine financial system during the first half of
2000. This came about as banks and non-banks alike sought ways to rapidly gain financial and marketing
strength amid the growing competition in the Philippine financial system.

Another interesting development was the Philippine financial system’s growing interest in micro financing
activities as a way of expanding business lines. Initiatives towards this end also dovetailed with the
government’s call for a more active support for priority development projects involving the lower income
groups. Further pursuits in this area were expected to pick up towards the end of 2000.

Philippine financial institutions positively responded to the call for greater vigilance over the stability of the
system as a whole. They focused their operations toward strengthening their ability to serve as the first
line of defense against financial crisis. The beefing up of reserves against losses remained a major
strategy toward this end. Simultaneously, improvements in the front and back offices were also
undertaken through the use of modern technology. This enabled them to not only provide better service to
clients but also to enhance risk management.

These concerted efforts of both the industry and the supervisory authority to further strengthen the
financial system will go a long way toward reinforcing public confidence. At end-June 2000, the system
remained fundamentally stable while remaining dynamic enough to constantly innovate to cope with the
increasingly sophisticated requirements of the Philippine economy.

Reference: http://www.bsp.gov.ph/publications/regular_status_1s00.asp