The Rural Bank of Calaca was established in 1961 and was originally family-owned. It has since expanded to include branches in other municipalities. While the Philippine banking system performed positively in 2014, credit remains skewed towards real estate. The management of Rural Bank of Calaca has taken steps to strengthen the bank by infusing capital and expanding loan and deposit services. A universal bank is considering acquiring Rural Bank of Calaca but must carefully evaluate financial documents and assess the bank's losses versus potential opportunities to expand into new areas.
The Rural Bank of Calaca was established in 1961 and was originally family-owned. It has since expanded to include branches in other municipalities. While the Philippine banking system performed positively in 2014, credit remains skewed towards real estate. The management of Rural Bank of Calaca has taken steps to strengthen the bank by infusing capital and expanding loan and deposit services. A universal bank is considering acquiring Rural Bank of Calaca but must carefully evaluate financial documents and assess the bank's losses versus potential opportunities to expand into new areas.
The Rural Bank of Calaca was established in 1961 and was originally family-owned. It has since expanded to include branches in other municipalities. While the Philippine banking system performed positively in 2014, credit remains skewed towards real estate. The management of Rural Bank of Calaca has taken steps to strengthen the bank by infusing capital and expanding loan and deposit services. A universal bank is considering acquiring Rural Bank of Calaca but must carefully evaluate financial documents and assess the bank's losses versus potential opportunities to expand into new areas.
The Rural Bank of Calaca was established in 1961 and was originally family-owned. It has since expanded to include branches in other municipalities. While the Philippine banking system performed positively in 2014, credit remains skewed towards real estate. The management of Rural Bank of Calaca has taken steps to strengthen the bank by infusing capital and expanding loan and deposit services. A universal bank is considering acquiring Rural Bank of Calaca but must carefully evaluate financial documents and assess the bank's losses versus potential opportunities to expand into new areas.
Download as DOCX, PDF, TXT or read online from Scribd
Download as docx, pdf, or txt
You are on page 1/ 4
Lauren Antonette M.
Mendoza
2013400059
Prosecutor Noemi Macababbad
Rural Bank of Calaca
Due Diligence Report Company Profile The Rural Bank of Calaca, Inc. was established in May 1961 as a family-owned bank with Judge Manuel P. Calanog and his wife, Dr. Dolores Macatangay-Calanog, as founders. The bank's services at the time consisted of the acceptance of savings deposit from, and the extension of simple loans to, residents of Calaca and neighbouring barrios. Lending was limited to extending small agricultural loans. Upon the demise of the founders, the children took over the ownership of the bank for a brief period. In 1991, the eldest daughter, Atty. Fe Calanog-Ona and her spouse, the former Judge Sofronio A. Ona, acquired all the shares of the Rural Bank and are now at the helm of its management with their children, Atty. Christine C. Ona, Dr. Jacqueline Ona-Joo, Sofronio C. Ona Jr. and Manuel C. Ona. Industry Profile According to the Banko Sentral ng Pilipinas study that was conducted, the Philippine banking system maintained its positive performance in the first half of 2014. Profit growth eased due to tempered trading gains. Banks, nevertheless, revert to lending activities as they prudently position their balance sheets and support the overall bottomline with interest-based income. Credit remains relatively skewed to the real estate sector. Universal/commercial banks have expanded their reach in areas considered as the home turf of rural banks, indicative of banks initiatives to support inclusive growth by providing access to finance for all Filipinos.
[Type text]
[Type text]
[Type text]
Financial Background The management has taken a new approach in its rural banking operations. Fresh capital was infused to strengthen its position in the rural banking industry. The bank's operations were upgraded to include savings deposit, time deposit and demand deposit/checking account. Loan coverage has been expanded to accommodate agricultural, commercial, industrial, personal, salary and special loans. The upgrading of its equipment was given priority to simplify operations and provide better service. Its stable standing made it inevitable for the bank to branch out to other municipalities. its branches in San Jose and Nasugbu, both in the province of Batangas, started operations in 1997 to further strengthen the Rural Bank of Calaca, Inc.'s presence in the countryside development. Pertinent Documents 1. Financial Report of The Rural Bank of Calaca - these reports should be obtained from the Securities and Exchange Commission in order to ascertain the assets and liabilities of the bank 2. List of all the properties that have been acquired through Real Estate Mortgage - the said list should be acquired from the 3. Guaranties, Loans and Credit Agreements 4. Employee Standings of Rural Bank of Calaca 5. Contracts that Rural Bank of Calaca have entered into 6. Management / Organization Chart of Rural Bank of Calaca -since this is a family owned company this should be ascertained in order to see if there will be posing problems in case of acquisition.
Lauren Antonette M. Mendoza
2013400059
Prosecutor Noemi Macababbad
7. All litigation proceedings
-whether from Past to Present 8. Insurance Policies Conclusion In the normal course of banks, when there is a possible bank run then it will pose as a huge risk for a new company that will acquire it. Banks generally have a reserve fund for each of their depositors in case of loss or bankruptcy. In this case, it was prevalent that there is already loss and due to possible bank run the bank will not pay the depositors anymore and it will be coursed through PDIC wherein there is a limit to what will be paid out to the depositors. In case it will be acquired, then all the rights, obligations will be transferred to the acquiring bank and the acquiring bank will be liable for the depositors of the Rural Bank of Calaca. Likewise, it was stated that there are still properties acquired by the Rural Bank through Real Estate Mortgage, but it has to be ascertained that this will be sustainable for the losses that the bank has already incurred. As for the small target market of the rural bank then it can be a good opportunity to create new job opportunities and it will not just be beneficial for the universal bank but for also the whole community. There are two scenarios that are to be considered in the case at bar. Given the circumstances and the documents acquired, I would advise the universal bank to acquire the Rural Bank if it has the financial capacity to sustain the losses. It is apparent that there are risks that are to be taken, but it can also be a good opportunity for the universal bank to expand and to reach more areas that other banks have not yet penetrated.
[Type text]
[Type text]
[Type text]
It can also be possible that there are no acquisition that
will be made if the universal bank is not that capable to ascertain their financial capacity and that if they will incur losses and if the rural bank will be more of a liability rather than a possible asset. In this case, on its face the rural bank has no more assets nor liquidated assets available and the universal bank should be ready with the obligations that will be transferred by the rural bank to them. References http://ruralbankofcalaca.com www.bsp.gov.ph/.../StatRep_1Sem2014b.pdf
