BPI Family Savings Bank to Merge With BPI

In a press-release disclosure to the Philippine Stock Exchange on January 20, 2021, Bank of the Philippine Islands (BPI) said that it is absorbing its wholly owned subsidiary BPI Family Savings Bank (BFSB).

BPI would be the surviving entity in the merger that is expected to be completed within the year.

BPI Family Savings Bank is the Philippines’ largest thrift bank. It has P287 billion in assets, P235 billion in deposits, P227 billion in loans, and about 3,000 employees. The thrift bank provides housing and car loans to its clients and is said to be a market leader in these loan segments.

BPI said the merger aims to “seize emerging opportunities and ultimately enhance the overall banking experience of (their) customers.” It will “provide considerable advantages to the customers and employees… and present potential synergies that will benefit shareholders.”

BPI President and Chief Executive Officer Cezar P. Consing, who is at the same time the chairman of BFSB, said that “If our customers and employees are better off, our shareholders will also benefit. This merger is timed to provide us with the platform to help lead the economic recovery that is sure to come.”

The merger came in an environment of eased monetary policies by the Bangko Sentral ng Pilipinas (BSP). The bank regulator presently holds interest rates and bank reserve requirements at low levels, designed to counter the effects of recession brought about by the covid-19 pandemic.

BPI said the narrowing of the gap in the reserve requirements between commercial banks (currently at 12%) and thrift banks (currently at 3%) was one of the factors in the timing of merger.

Last year, BFSB said it was not keen on merging with its parent company but that it was something they always assessed regularly. Back then, the BSP required thrift banks to hold at least 8% of their deposits, 10% lower than the 18% reserve requirement at that time for commercial and universal banks.