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GM Bank of Luzon raising capital, eyeing 10 new branches in 2011 PDF Print E-mail
Tuesday, 15 March 2011 00:03

(The 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 2 capital.

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 Luzon Inc.

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 regulatory requirements.

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.


Source: philstar.com

Last Updated on Tuesday, 15 March 2011 03:23
GM Bank eyes fourth consolidation in Region 3 PDF Print E-mail
Friday, 27 March 2009 05:19

The GM Bank Inc. is looking to absorb its fourth bank to strengthen its position as among the leading Rural banks in Central Luzon.“The shareholders of Bangko Luzon Inc. and GM Bank have approved a merger/consolidation in a stockholders meeting last year,” Tomas Gomez IV, GM Bank president and chief executive officer, said.


 Gomez admitted that GM Bank is completing its application and other documentation requirements with the Bangko Sentral ng Pilipinas (BSP). This will result in the rural bank expanding its branch network to 31. That is without prejudice to its application for five new branches this year. It also operates 15 automated teller machines (ATMs), with another seven in the pipeline.


 GM Bank is a product of a consolidation between the Community Rural Bank Inc. (CRBI) and the Muñoz Rural Bank Inc. (MRBI), both based in Nueva Ecija. In July 2008, the Small and Medium Enterprises Bank (SME) merged with GM Bank. Bangko Luzon is actually an affiliate bank of GM Bank based in San Isidro, Nueva Ecija, with branches at Cabanatuan, Cabiao, San Antonio, Sta. Rosa and Gapan.

 Gomez said that the integration of SME Bank did not amount to much in terms of merger costs as some of its backroom operations have already been integrated. “Also, there was minimal overlap in branch network,” he said, adding that with the merger resulted in expanding GM Bank’s branch network in the provinces of Bulacan, Pampanga, Tarlac, Nueva Ecija, and Pangasinan. Asked whether the rural bank was interested in further acquisitions or mergers, the bank president said that they were always open for good opportunities.


 “GM Bank is always open and ready to look at potential acquisition deals.  However, it all depends on the asset quality of the target, potential cost savings after integration, and possible overlap in branch network. Presently, we are not conducting due diligence or negotiating with a target,” he said. Earlier, GM Bank raised P75 million after it issued its second Tier 2 debt notes issuance. Significantly, the two main subscribers were Country Bankers Life Insurance Corp. and Manila Bankers Life Insurance Co., two of the oldest life insurance companies in the country.


 “It is the first time an insurance company has invested in debt notes issued by a rural bank in the Philippines,” Gomez added. In 2007, GM Bank issued its first-ever debt notes worth P75 million. It was immediately gobbled up by market, noting that it was the first debt paper issued by a rural bank. The issue manager was the Multinational Investment Bancorporation with legal due diligence provided by Picazo, Buyco, Tan, Fider and Associates.

 Tier 2, or subordinated debt notes, are long-term instruments issued by banks that qualify as capital for capital adequacy ratio (CAR) purposes.   – Ted Torres


Last Updated on Monday, 13 September 2010 00:04
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