Go family gives up EPCI Bank

Banco de Oro Universal Bank, controlled by the family of mall tycoon Henry Sy, sealed its bid to buy into Equitable PCI Bank with the acquisition of the entire 25-percent stake owned by the Go family, the founders of the country’s third largest bank.

In a statement issued yesterday, Banco do Oro — the country’s seventh biggest lender, said it had signed a deal with the Go family to buy into EPCI Bank worth about P11 billion.

In a separate statement, EPCI Bank said the Go family would sell up to 180 million common shares in the bank to Banco de Oro, the banking arm of conglomerate SM Investments Corp.

The acquisition of EPCI Bank would more than double Banco de Oro’s assets to P538 billion, tying Metrobank at the top and overtaking Bank of the Philippine Islands. EPCI Bank is Banco de Oro’s fifth and biggest acquisition in as many years.

"That’s a positive development for the banking system. It’s consistent and in line with our desire to see bigger and stronger banks, said Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr.

Banco de Oro and the SM Group will buy the EPCI Bank shares and a 10-percent stake in the bank’s credit card unit, Equitable Card Network Inc., from the Go family, Banco de Oro president Nestor Tan said in a telephone interview.

He said while control of a quarter of the bank’s equity is already considered a major investment, "it is not yet a takeover." The purchase will give the Sy group four seats in the bank’s 15-man board.

Banco de Oro will pay P56.50 a share — a 13 percent premium over EPCIBank’s share price last Thursday – for the 180 million shares, said Banco de Oro chairwoman Teresita Sy-Coson. The combination would more than double deposits at Banco de Oro to P347 billion and more than triple branches to 585.

"It’s a good move for Banco de Oro because it gives them size and market reach,’’ said Gilbert Lopez, an analyst at Macquarie Securities Asia.

The 79-year-old Sy has been expanding Banco de Oro to round out his consumer-oriented empire. Many Filipinos exchange foreign currency in the malls, which encourages tenants to open Banco de Oro accounts and gives preferential rewards to shoppers who use the bank’s credit cards.

"There will be plenty of room for savings and synergies,’’ said Erick Tan, a fund manager at BPI Asset Management.

EPCIBank’s shares rose nine percent at yesterday’s trading to close at P54.50, the highest in more than four years. Banco de Oro’s stock rose five percent to P31.50, the biggest one-day gain in more than two months. Shares of SM Investments Corp., Sy’s holding company, rose 2.8 percent to P222, the largest gain in four months.

Sy has targeted EPCIBank since the start of last year. Banco de Oro at the time agreed to buy a 26-percent stake from state-run pension fund Social Security System (SSS) for about P8 billion. The sale was blocked in part by the Go family, but Coson said the Banco de Oro group is still interested in the SSS stake.

SSS was part of a group of stockholders who walked out of EPCIBank’s July 19 annual meeting and elected its own board. The Go family and its allies proceeded with the meeting and elected another board. The Supreme Court issued a temporary restraining order (TRO) last Thursday, preventing the Go-led directors from acting as the bank’s board.

The Government Service and Insurance System (GSIS), another state-run pension fund that was part of walkout, may sell its 14 percent stake to Sy, GSIS president Winston Garcia said yesterday.

"If the price is right, we will,’’ Garcia said.

"Hopefully, with this transaction, there can be a quick and orderly resolution of the shareholder issue besetting the bank, said Tetangco.

Metrobank has P538 billion of assets, P389 billion of deposits and 712 branches, according to the bank and Bloomberg data, based on first-quarter results. Bank of the Philippine Islands last week agreed to buy Prudential Bank, creating a lender with P521 billion in assets, P397 billion of deposits and 895 branches.