PDIC approves PNB-Allied Bank merger

Manila, Philippines - The planned merger of two banks owned by tycoon Lucio Tan Philippine National Bank (PNB) and Allied Banking Corp., has finally gotten the approval of the Philippine Deposit Insurance Corp. (PDIC).

In a disclosure to the Philippine Stock Exchange (PSE), PNB said it has received notice from the PDIC that it has given its approval for its merger with Allied Bank.

“We would like to inform the Exchange that we received today (July 25) an advice from the Philippine Deposit Insurance Corp. (PDIC) granting consent to the proposed merger of the Philippine National Bank (PNB) and Allied Banking Corp., with PNB as the surviving entity... subject to certain conditions,” PNB said in its disclosure.

PDIC’s endorsement paves the way for the evaluation of the Securities and Exchange Commission (SEC) and the Bangko Sentral ng Pilipinas (BSP) of the merger. An approval of both bodies will complete the transaction.

The merger of PNB and Allied Bank would create the country’s fourth largest bank in terms of assets.

The STAR reported last week that PDIC’s endorsement would likely come out this quarter, more than a month after the Sandiganbayan dismissed government’s case against Allied Bank, thereby removing the last hurdle to the merger.

The case involved certain Allied Bank shares which the Philippine Commission on Good Government (PCGG) said were part of the ill-gotten wealth of late dictator Ferdinand Marcos. PCGG argued that pushing through with the merger will make it difficult for the government to claim the shares. The Sandiganbayan however said the state failed to prove its case.

PNB and Allied Bank officials could not be reached for comment.

Sought for comment, SEC Chairman Teresita Herbosa said regulators would study the proposal very well.

“We would now look at it and they would have to complete the basic requirements which I am sure they have already,” Herbosa said in a phone interview. She, however, declined to say how long the approval process will take.

BSP Deputy Governor Nestor Espenilla Jr. declined to comment on the matter.

PNB and Allied Bank shareholders approved the merger as early as 2008. The banks then started merging operations last year ahead of securing regulatory approvals. – Prinz Magtulis, Donnabelle Gatdula