MB set to okay Banco de Oro’s acquisition of UOB’s branches

The Monetary Board (MB), the policy-making body of the Bangko Sentral ng Pilipinas (BSP), is likely to approve soon Banco de Oro Universal Bank’s acquisition of the 66 branches of United Overseas Bank (UOB).

"It’s just a matter of time. We expect the MB to discuss the application soon. Definitely, the MB decision will be out within the year," BSP Deputy Governor Nestor Espenilla said yesterday.

Espenilla said the main concern on the BDO’s acquisition of UOB branches is "the acceptance of a structure."

"There are some clarifications that need to be discussed. But this is just a matter of process and time," he added.

BDO president Nestor Tan said if the MB will approve the purchase, they expect to operate the 66 UOB branches in the first quarter of 2006.

At present, BDO has 185 branches. As of March 2005, BDO ranks seventh largest bank in the Philippines in terms of assets with P197.2 billion.

BDO is controlled by retail tycoon Henry Sy, whose group operates the Philippines’ largest shopping mall chain.

United Overseas Bank Ltd. (UOB), Singapore’s second-largest bank, sold all but one of the branches in its loss-making Philippines operations to BDO for P600 million ($11 million).

UOB sold 66 of its 67 branches to BDO to concentrate on its plan to put more focus on the wholesale banking business.

In 1999, UOB paid P3.3 billion ($82.5 million) for 60 percent of the Philippines-based Westmont Bank.

It later renamed it UOB Philippines. UOB Philippines incurred a loss of S$21.2 million ($12.9 million) last year and a S$19.7 million loss in 2003. UOB earned a net profit of S$1.54 billion in 2004.