SMC sells 60% of bank unit to CIMB

MANILA, Philippines - San Miguel Corp. (SMC) has signed a deal selling 60 percent of its unlisted banking unit Bank of Commerce to Malaysia’s second-largest lender CIMB Group for more than $280 million, SMC’s top executive said yesterday.

The deal marks CIMB’s entry into the Philippines as the lender expands in the region. The bank’s latest acquisitions include its purchase of some Asian units of Royal Bank of Scotland Plc last month.

Under the deal, CIMB will be acquiring 60 percent of medium-sized Bank of Commerce. SMC will be selling around 40 percent of its stake while the rest of the shares will be sold by minority shareholders.

The conglomerate’s stake in the banks is held by its subsidiaries San Miguel Properties Inc and San Miguel Retirement Fund, which together hold about 76 percent of Bank of Commerce.

“It is a done deal,” SMC chief executive Ramon S. Ang told reporters early yesterday afternoon, referring to the share transfer agreement deal.

The CIMB Group operates across ASEAN under several corporate entities including CIMB Investment Bank, CIMB Bank, CIMB Islamic, CIMB Niaga, CIMB Securities and CIMB Thai.

It operates in 14 markets around the globe, but its main markets are in Malaysia, Indonesia, Singapore and Thailand. It focuses on consumer banking, corporate and institutional banking and markets and group asset management and insurance.

As of end-September 2011, CIMB Group was Malaysia’s second largest financial services provider and the second largest company on Bursa Malaysia, with a market capitalization of 51.8 billion ringgits. The holding company, CIMB Group Holdings Berhad, is listed on Bursa Malaysia.

According to Bank of Commerce officials said the entry of CIMB would allow the local bank to acquire a regional character, thus complementing the regional expansion of the San Miguel Group.

At the same time, it would allow CIMB to ride on the aggressive expansion of San Miguel. Recently, it acquired some of the Asian assets the Royal Bank of Scotland (RBS) worth $278.4 million. It would open CIMB a foothold in Taiwan, Australia, Hong Kong, India and China.