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BPI seen PHL’s 2nd-largest lender on merger’s fruition

JG Summit Capital Services Corp., a wholly-owned subsidiary of publicly-listed JG Summit Holdings Inc. has approved the execution of an agreement between its bank and Bank of the Philippine Islands of the Ayala Corp.

The deal will make BPI as the country’s second-largest lender.

According to the deal, BPI and JG Capital and Robinsons Retail Holdings Inc. approved the merger between Robinsons Bank Corp. with BPI; the latter emerging as the surviving entity.

Upon the effectivity of the merger after receipt of all necessary corporate and regulatory approvals including the approvals of the Philippine Competition Commission, the Bangko Sentral ng Pilipinas, the Philippine Deposit Insurance Corp. and the Securities and Exchange Commission, Robinsons Bank shareholders will collectively hold approximately 6 percent of the resulting outstanding capital stock of BPI.

Executives of both parties said they hope to complete the merger before the end of 2023.

The firms’ disclosure to the Philippine Stock Exchange noted that the merger will unlock various synergies across several products and service platforms, expand the customer and deposit base of both banks through the merged entity.

BPI President and CEO Jose Teodoro K. Limcaoco was quoted in a statement as expressing “excitement” on the transaction.

“We believe that this merger exemplifies BPI’s strategic effort to expand its client base, accelerate growth and ultimately increase shareholder value through partnerships with the Gokongwei Group.”

BPI’s share price ended last week at P89.50, down by P0.50 from the previous close.

Robinsons Bank products and services cater to its corporate, commercial and retail clients through its 189 branches and branch-lite units including 14 branches and 14 branch-lite units of its subsidiary, Legazpi Savings Bank, 354 ATMs and online and mobile banking channels.

As of end June, Robinsons Bank has total assets of P175.9 billion, including net loans and receivables of P102.4 billion, and total liabilities of P156 billion, including deposits of P139 billion.

Scale game

JG Summit President and CEO Lance Y. Gokongwei said that “through the years, the Gokongwei Group has built and supported the growth of Robinsons Bank from a small savings bank to become one of the fastest-growing, full-service commercial banks in the country today.”

“However, we reviewed our strategic options to determine its future and we are cognizant that banking is a scale game and will continue to require additional capital for growth,” said Gokongwei.

He believes that merging Robinsons Bank with BPI “is the best path forward.”

“This will give our customers access to a fuller range of banking products and services as the combined organization will leverage on ecosystems of both the Gokongwei and Ayala Groups,” Gokongwei said. “The merger will also open more opportunities for our talented employees given that BPI will continue to grow, evolve and adapt to the rapidly changing market environment.”

BPI is one of the oldest banks in the world with a 171-year history and is considered the first bank in the Philippines and Southeast Asia.

RBC, meanwhile, is celebrating its 25th anniversary on 27 November 2022. The bank has been recognized as the fastest growing commercial bank in the country for the past three years.

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