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THE
Securities and Exchange Commission (SEC) officially
approved on Monday the merger between Banco de Oro (BDO)
Universal Bank and Equitable PCI Bank, with Banco de Oro
as the surviving entity.
The
merged entity will create the second largest bank in
terms of total assets; third biggest in net loans,
second in deposits and third in branch network. At
present, Metrobank is considered the country’s largest
bank.
Also
approved was the change in name to Banco de Oro-EPCI
Inc. as well as the increase in the authorized capital
stock of BDO to P65 billion, divided into P5.5-billion
common shares and P1 billion preferred shares, all with
a par value of P10 per share.
All of
the foregoing approvals will take effect on May 31.
Banco de
Oro’s annual stockholders meeting scheduled on July 27
and the record date set for June 15 are now the annual
stockholders meeting and record date of the merged
institution.
The
integration of the banks networks entails huge spending
and BDO said the group has the resources to support the
procedure. The integration will be completed in 2008.
Teresita
Sy, eldest daughter of shopping mall magnate Henry Sy
and the one responsible for leading the merger, said she
wanted to see the merged entity maintain market leading
positions in their core business lines that include
corporate and middle-market banking, consumer banking,
credit cards, assets management, remittances, leasing
and finance.
The
respective board of directors of BDO and Equitable
approved the merger plan last November 6, effecting the
largest merger in Philippine banking history.
The
combined company is expected to realize substantial
revenues and cost synergies in the coming years.
There
will be greater opportunities to expand fee-based income
and cross-selling potential through the banks’ expanded
product offering and customer base and through the SM
Group network. The combined entity also expects to
increase its low cost deposit gathering capabilities
through its larger distribution network, said BDO
president Nestor Tan.
At the
end of the first quarter, BDO consolidated net income
amounted to P838 million, helped by substantial
increases in net interest income and fee-based income.
On the
other hand, Equitable’s unaudited net income
attributable to equity holders of the parent surged to
P937 million, due to steady contribution of net interest
income, a healthy growth in non-interest income, and
conscious cost control. |
