Regulatory Incentives for Mergers/Consolidations and/or Acquisitions of Majority or all of the Outstanding Shares of Stock of a Bank/Quasi-bank

BANGKO SElltINAL NG PII.IPINAS OFFICE OF THE DEPUTY GOVERNOR SUPERVISION AND EXAMINATION SECTOR MEMORANDUM NO. M-2016. 023 To: AtL BANKS and QUASI-BANKS Subject: Regulatory Incentives for Mergers/Consolidations and/or Acquisitions of Majority or all of the Outstanding Shares of Stock of a Bank/Quasi-bank Pursuant to Subsections X108.3 of the Manual of Regulations for Banks and 4108Q.3 of the Manual of Regulations for Non-bank Financial Institutions, the BSP promotes mergers/consolidations and/or acquisitions of majority or all of the outstanding shares of stock of a bank/quasi-bank (QB) to strengthen the financial capabilities and enhance overall competitiveness of banks and QBs. Concerned banks/QBs may request regulatory incentives that are responsive to their specific needs and reasonable given the attendant circumstances. Any request shall be subject to BSP's evaluation and approval. Banks/QBs may refer to the following sample list of possible incentives: a. Revaluation of premises, improvements and equipment; b. Staggered booking of unbooked valuation reserves over a maximum period of 5 years; c. Temporary relief from compliance with capital adequacy ratio (CAR) and/or maximum period for amortization of goodwill; d. Conversion/upgrading of head offices, branches, and other offices; e. Condonation of liquidated damages/penalties on loan arrearages to the BSP; f. Relocation of branches/offices within 1 year in cases of duplication of branches in certain areas; g. Installment payment of outstanding penalties in legal reserve deficiencies and interest on overdrafts with the BSP over a l.-year period; h. Reasonable period to comply with real estate loan limits; i. Restructuring past due obligations with BSP over a 10-year period; j. Concurrent officership between a merged or consolidated bank or financial institution (Fl) and another bank/Fl, and concurrent directorship between banks; and k. Continued effectivity of right or privilege under a rehabilitation program or any special authority granted by the MB. For information/guidance. 2,1 December 2016