M&A binge predicted for Philippine banks

Will be led by mid-sized commercial banks.

The Bangko Sentral ng Pilipinas expects a rise in mergers and acquisitions in the banking industry, especially for mid-sized commercial banks as ASEAN prepares for a closer banking network relationships.

BSP noted that mid-sized or middle capitalized banks are more aggressive in M&As involving smaller thrift banks and rural banks. It said consolidation is beneficial since it allows banks to achieve critical mass to compete in the Philippines and against regional banks that will become more serious competitors with the advent of the ASEAN Economic Community in 2015.

The number of banking institutions in the country stands at 696 as of 2012 compared to 726 in 2011.

The BSP’s supervises universal/commercial banks, thrift banks, rural and cooperative banks. The universal and commercial bank category includes private domestic banks, subsidiaries of foreign banks and branches of foreign banks.

In 2012, there were a total of 37 universal/commercial banks from 38 in 2011 after.

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