MANILA, Philippines – Bank of Commerce, the banking arm of diversified conglomerate San Miguel Corp., is raising its capital in its bid to obtain a universal bank status and fortify its presence in the domestic market.
Roberto Benares, president and CEO of the bank, said they are boosting the capital base in light of the integration of the banking industry in the Association of Southeast Asian Nations (ASEAN).
“It is imperative that we get bigger, stronger and better in the face of ASEAN integration and the rigid competition that we expect from it. A unibank status will afford us the flexibility we need to expand our services and grow our presence here to achieve scale,” Benares said.
He pointed out the local banking sector could compete against bigger potential new entrants from the region and could benefit from a regional market of some 600 million potential customers.
Under the ASEAN Banking Integration Framework (ABIF), Indonesia, Malaysia, Philippines, Singapore and Thailand should conclude at least one bilateral agreement with another ASEAN member country by 2018.
By 2020, ABIF targets the conclusion or near conclusion of at least one bilateral agreement for each of the 10 ASEAN members as part of the integration under the ASEAN Economic Community (AEC).
As of end-2016, data from the Bangko Sentral ng Pilipinas (BSP) showed Bank of Commerce ranked 15th in terms of capital with P15.36 billion and 17th in terms of assets with P136.84 billion. It placed 16th in terms of deposits and loans with P117.49 billion and P61.6 billion, respectively.
The BSP allows universal banks to engage in underwriting and other functions of investment houses and to invest in equities of non-allied undertakings in addition to the function of an ordinary commercial bank.
Benares said obtaining a universal bank license would allow the SMC unit to participate in upcoming debt and equity capital fund raising.
“It is expected that the private sector will need to raise funds in the coming years to finance capital expenditure in infrastructure and capacity expansion from a fast growing Philippine economy,” he added.
Bank of Commerce is one of the country’s progressive commercial banks that started operations in 1963. In 2008, SMC invested in the bank that has now close to 130 branches nationwide.
(Article from www.philstar.com/banking)