We have just learned that Bank of Commerce, one of the country’s leading commercial banks, is turning universal.
A universal bank has the same powers as a commercial bank, except that in addition, a unibank has the powers of an investment house and the power to invest in non-allied enterprises. As a universal bank, Bank of Commerce will be able to do underwriting, which is the process by which investment bankers raise capital from investors on behalf of corporations and governments that are issuing securities, both debt and equity.
According to the Bangko Sentral ng Pilipinas (BSP) website, our country currently has 21 universal banks. These are RCBC, Security Bank, Union Bank, UCPB, Al-Amanah, DBP, Landbank, ANZ, Deutsche Bank, ING Bank, Mizuho Bank, Standard Chartered, HSBC, Asia United Bank, BPI, BDO Unibank, China Bank, EastWest, Metrobank, PNB, and Philippine Trust Company.
Meanwhile, we have 19 commercial banks and these are Cathay United Bank, Shinhan Bank, Industrial Bank of Korea, Bank of Commerce, BDO Private Bank, Philippine Bank of Communications, Philippine Veterans Bank, Robinsons Bank, CTBC Bank, Maybank, Bangkok Bank, Bank of America, Citibank, JP Morgan Chase Bank, Korea Exchange Bank, Mega International Commercial Bank, Bank of Tokyo, and Sumitomo Mitsui Banking Corp.
Universal banks are required to have a higher capitalization than commercial banks. Under the revised rules issued by the BSP last year, the minimum capital levels of both unibanks and commercial banks are tiered depending on the number of branches they have, unlike before when there was only one level of minimum capitalization required (P4.95 billion for universal banks and P2.4 billion for commercial banks).
Now, if a universal bank has more than 100 branches, the minimum capital is P20 billion, followed by P15 billion if it has 11-100 branches, P6 billion for up to 10 branches, and P3 billion for head office only. In the case of commercial banks, the requirement is P15 billion for more than 100 branches, P10 billion for 11-100 branches, P4 billion for up to 10 branches, and P2 billion for head office only.
We have just learned that BOC’s board of directors has approved an increase in the bank’s capitalization to conform to the BSP requirements.
For comments, e-mail at email@example.com.–Mary Ann LL. Reyes (The Philippine Star)