32935 - PR Bank Equity

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Summary of Investment Information

Project Number

32935

Company Name

PHILIPPINE RESOURCES SAVINGS BANKING CORPORATION

Date SPI Disclosed

Feb 28, 2013

Country

Philippines

Region

East Asia and the Pacific

Projected Board Date

Apr 1, 2013

Environmental Category

FI-3 - No Impact

Status

Completed

Last Updated Date

Jun 12, 2021

Department

Regional Industry - FIG Asia & Pac

Industry

Financial Markets

Previous Events

Approved : Apr 24, 2013
Signed : May 27, 2013
Invested : Apr 17, 2014

Sector

Commercial Banking - Microfinance

Project Description

The Project involves an investment in Philippine Resources Savings Banking Corporation (“PR Savings Bank” or the “Bank”), an independent thrift bank in the Philippines, of (i) up to PHP650 million (~US$16 million equivalent) in redeemable preferred shares and (ii) an option to subscribe to up to PHP250 million (~US$6 million equivalent) in common shares. The Bank provides banking and other financial products and services mostly to the unbanked and underbanked population.

IFC’s proposed investment will increase the Bank’s regulatory capital in anticipation of the full implementation of Basel 1.5 by 2014, and support the expansion of the Bank’s SME and microfinance lending program to the rural areas of the Philippines.

This project fits in with IFC’s strategy to support the Philippine financial markets through equity type investments in local financial institutions that play a key role in increasing financial inclusion by providing access to finance to underserved sectors such as micro-entrepreneurs and small farmers.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	22.03

Development Impact

The most significant impacts of this investment are expected to be: (1) strengthening the micro and small business sector (particularly in rural areas) by increasing access to finance for SMEs, micro-entrepreneurs and agricultural borrowers; and (2) contributing to the strengthening of corporate governance standards and environmental and social management in the Philippine thrift and rural banking sector

IFC would be playing an active role in: (i) providing much-needed equity and long-term funding support not readily available in the domestic markets particularly to rural and thrift banks; (ii) supporting increased access to finance to SMEs, microfinance and the agricultural sector particularly in rural areas, (iii) providing access to IFC''s global microfinance and SME expertise and network of SME and microfinance clients, (iv) introducing best practices to the rural banking sector, particularly in corporate governance, risk management and E&S management, and (v) providing the Bank with IFC''s stamp of approval should it proceed with its plans to IPO.

E&S Category Rationale / Risks and Mitigation

This project involves investments of up to PHP650 million (~US$16.0 million equivalent) in redeemable preferred shares and an option up to PHP250 million (~US$6.0 million equivalent) in common shares in PR Savings Bank to support its business growth. The project has been categorized as FI-3 in accordance with IFC’s Environmental and Social Review Procedure. PR Savings Bank, being a thrift bank of Philippines, provides personal and business lending services and more than 90% of its business lending are micro business loans supporting mainly small wholesale, retail and transportation services. The activities likely supported by this project entail minimal potential E&S risk and impact. For this project, the Bank will be required to develop and implement an environmental and social management system (ESMS) to manage its business lending activities. The ESMS should be designed and constructed for ensuring compliances with IFC exclusion list and applicable national E&S laws and regulations. References of IFC exclusion list and a full list of applicable national E&S Laws and regulations should be incorporated in the ESMS documentation. The Bank will also be required to comply with IFC Performance Standard 2 Labor and Working Conditions for its own labor practices.

Contacts

For Inquiries About the Project, Contact

Jason S. Galang
Vice President/Chief Finance Officer
Philippine Resources Savings Bank
G/F One Corporate Center,
Meralco Avenue, Ortigas Center, Pasig City
mailto:jasongalang@ropali.ph
+63917 593 4029

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This Summary of Investment Information (SII) is prepared by IFC to disclose a factual summary of the main elements of the potential investment. It also includes findings and recommendations related to environmental and social considerations regarding this potential investment. The purpose of the SII is to enhance the transparency of IFC’s activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this SII is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein. It is distributed in advance of IFC Board of Directors’ consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following SII is disclosed in accordance with IFC's Access to Information Policy (AIP) that went into effect on January 1, 2012.

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