Philippine Star) Updated March 08, 2011 12:00 AM
MANILA, Philippines - GM Bank
of Luzon Inc., the newly consolidated rural bank based in Nueva Ecija, is still in the expansion mode.
And it is raising P40 million worth
of Tier 1 capital to feed its appetite. In 2009, it raised P75 million in Tier
At the close of 2010, the Bangko Sentral ng Pilipinas (BSP) and the
Securities and Exchange Commission (SEC) gave then GM Bank Inc. the nod to
consolidate with Bangko Luzon to form GM Bank of
The consolidation process
resulted in a larger rural bank with a combined branch network of 35, among the
largest in Region III.
“We will complete five
branches by July this year, and immediately apply for five more,”
Tomas S. Gomez IV, president
and chief executive officer of GM Bank of Luzon, said.
That could mean a complement
of 45 branches by end-2011.
Of the five new branches to be
established in the first semester of 2011, three will be located in Pangasinan and two in Nueva Vizcaya.
It already operates branches in Tarlac, Pampanga, Bulacan and Nueva Ecija.
Gomez likewise revealed that
they are presently operating three micro banking offices (MBOs) or other
banking offices (OBOs). One located in Sta. Ana, Pampanga and two in Nueva Ecija.
A regular OBO undertakes
purely non-transactional banking related activities such as marketing, customer
care services, acceptance of loan applications, among others.
A microfinance OBO (MF-OBO) or
MBO provides a wide range of transactional activities, which reflect the
particular needs of the un-served and underserved market, particularly
microfinance clients, overseas Filipinos and their beneficiaries.
Gomez said that OBOs not only
expands microfinance operations, but also tests the market if it can absorb a
full bank complement.
“The primary emphasis is still
microfinance. It allows us to put extra emphasis on the savings side of
microfinance,” he added.
The country’s rural banking
sector is still in the long-drawn process of consolidating as the challenges of
the financial sector increases both in terms of market demand as well as
Thirty-seven percent of the
country is without a financial institution. Others are underserved or incapable
to fulfilling the deposit or lending needs of the population.
Likewise, the country’s
banking system is pressured by tighter regulatory environment to stay healthy
forcing out the incapable institutions.
The former GM Bank is in fact
a product of the consolidation of three Nueva Ecija-based
banks, Community Rural Bank Inc., the Muñoz Rural Bank Inc., and the SME Bank.
“We are still looking for
opportunities (to acquire or consolidate) while the consolidation process in
the sector is still ongoing,” the GM Bank of Luzon chief executive said.