Monetary Board OKs another foreign bank
The Monetary Board, the policy-making body of the Bangko Sentral ng Pilipinas, approved the application of another foreign lender planning to enter the domestic banking industry.
The latest approval brought to six the number of foreign banks whose applications were approved by the board this year.
Bangko Sentral Deputy Governor Nestor Espenilla Jr. declined to reveal the identity of the bank.
“There was an approval. But the bank did not make a disclosure yet, so I can’t say,” Espenilla said in a text message. The Bangko Sentral refrains from disclosing the names of approved foreign banks because they are listed firms in the country where they are based. The bank regulator only does so after these banks already made a disclosure.
The Bangko Sentral in July approved the application of Taiwan-based Yuanta Commercial Bank Co. Ltd., which was taking full control of the Makati-based thrift bank Tongyang Savings Bank from its affiliate Yuanta Securities Korea.
Yuanta’s application became the fifth approved this year by the Bangko Sentral since the domestic banking industry was further liberalized in 2014 to lure more foreign direct investors.
The Bangko Sentral earlier this year approved the applications of Industrial Bank of Korea, Shinhan Bank of Korea, the Japan-based Sumitomo Mitsui Banking Corp., and Taiwan-based Cathay United Bank.
Espenilla said there was no limit for the number of foreign bank applications that the Bangko Sentral could approve.
He said foreign banks’ penetration rate in the country was actually small, currently just around 11 percent. The penetration rate in other countries is higher.
Foreign banks are allowed to control up to a combined 40 percent of the total assets of the banking system. This is 10 percentage points higher than the previous 30-percent limit.
The Yuanta expansion was the first mode of a 100-percent acquisition in the domestic banking industry rather than just branching, which was done by the first four approved banks--the Industrial Bank of Korea, Shinhan Bank of Korea, Sumitomo Mitsui Banking Corp. and Cathay United Bank.
The expansion of Asian banks could be expected in the Philippines because aside from the further liberalization of the domestic industry, Asia is the growing part of the global economy and Asian companies are trading among themselves, not to mention the approaching Asean economic community.
Espenilla said there were also some queries from foreign banks based in Europe and the United States “but they were not moving now.”