Davao-based One Network Bank, owned by businessmen Victor A. Consunji and Alex V. Buenaventura, has sought Bangko Sentral ng Pilipinas (BSP) approval to consolidate with Rural Bank of New Corella of Davao del Norte.

The bank, considered the largest in the Visayas and Mindanao areas, entered into a memorandum of agreement (MOA) with RB New Corella in August last year, after its board of directors approved the acquisition. It is the fourth bank in the merged One Network Bank, which included the former Rural Bank of Panabo of Davao del Norte, Provident Rural Bank of Cotabato and Network Rural Bank of Davao del Sur.

Based on its proposal with the BSP, the bank wants to consolidate with the RB New Corella, thereby absorbing its operations since it will be renamed as One Network Bank Inc.

BSP Governor Amando M. Tetangco Jr., in a speech delivered to members of the Rural Bankers Association of the Philippines recently, continues to encourage mergers and acquisitions in the rural banking sector to expand loan portfolios and network reach.

"Rural banks as a sector continue to hold the lion’s share of the banking industry’s network in the countryside," he said. "For instance, while the ongoing consolidation in the banking sector reduced the number of rural banks by 4 percent - from 658 in 2008 to 631 in 2009 - the branching network showed a significant 45 percent increase - from 1,362 to 1,974 branches."

"Through rural banks, therefore, we expect that more unserved and underserved Filipinos will gain access to responsible and dependable financial services. It can be a simple savings account, a time deposit, an efficient way to pay bills, an insurance product, a microfinance loan, or even just a safe channel to send and receive money," said Tetangco.

Rural banks' total assets increased from P146 billion in 2008 to P157.4 billion in 2009. The sector's gross total loan portfolio totaled almost P100 billion.

Philippine Deposit Insurance Corp. President Jose A. Nograles said the sector's deposit base, which at the end of 2009 was at P105 billion, grew to P119 billion by the end-March this year. "This was as stark contrast to the negative growth of 13.2 percent registered by the sector in 2009. (This signals) some progress in expanding access (to) mainstream banking services," he said.

The BSP, ever watchful of rural banks' capital health, has closed down 10 rural banks in the first half of the year. At the same time, it has allowed and granted additional branches to performing banks in a bid to expand presence in the countryside.

One Network Bank, for example, has 75 branches and is applying for at least seven more licenses with the BSP. The bank, which is a member of inter-bank facility Megalink, operates 96 automated teller machines in Mindanao alone.

According to its website, it is the first rural bank to transact on the Philippine Clearing House Corp. for check clearing.