Entry of new investor in BoC seen before yearend

MANILA, Philippines - Bank of Commerce (BoC), owned by the San Miguel Corp. (SMC) group, is optimistic that it can firm up the entry of new investors before the end of the year, a top bank official told The STAR.

“We are confident that the (BSP) approval will be made this year. The Malaysian buyers, I think, have already completed all the necessary documents for the acquisition. We are just waiting for the regulatory approval,” BoC president Sergio Edeza said.

Edeza said the entry of the new owners of the bank would further accelerate their network expansion program which is currently focused on setting up more automated teller machines (ATMs) nationwide.

The bank official said they are aggressively jacking up the number of their ATM facilities to improve their presence in other areas in the country without necessarily putting up more branches.

“We are going to expand our ATM network to 400 this year,” he said. Last year, the bank has 300 ATMs.

He said they would put up a modest three to eight new branches this year.

“We have 122 branches. We hope to end the year with 125 to 130 branches,” he said.

He said one of the bank’s thrusts is to reach out to as many clients as possible through electronic means.

“As a smaller bank, we would like to expand client’s base through electronic and mobile banking which, I think, is the way of the future. Our new shareholder (CIMB) is expected to bring in technologies which will allow us to increase our presence in local and international banking arena,” he said.

For next year’s expansion program, Edeza said they would have to wait for the completion of the entry of new strategic investor.

Headquartered in Kuala Lumpur, the CIMB group is now present in eight out of 10 ASEAN nations (Malaysia, Indonesia, Thailand, Singapore, Cambodia, Brunei, Vietnam and Myanmar).

Beyond ASEAN, the group has market presence in China, Hong Kong, Bahrain, India, Sri Lanka, the US and UK. As of end-2011, it has the largest branch network in ASEAN with 1,117 branches.

 “The BSP has already lifted the limit on the number of branches that a bank can put up. But it will still depend on our new shareholder for our new expansion strategy in 2013,” he said.

According to Edeza, the entry of CIMB, Malaysia’s second largest financial services provider and one of ASEAN’s leading universal banking groups, would enable BoC to further improve its delivery of products and services to its clients.

While waiting for the completion of the acquisition process, he said they would want to maintain a flat income growth for this year. In 2011, the bank made a net income of about P600 million.

Edeza, however, pointed out that they would expect their loan portfolio (for both consumer and corporate) to register a modest growth of 20-30 percent.

In May this year, BoC signed a 58-percent sale purchase agreement with CIMB Bank, San Miguel Properties Inc., the San Miguel Corp. Retirement Plan, Q Tech Alliance Holdings Inc. and various minority shareholders.

SMC Retirement Plan will remain BoC’s largest minority shareholder with a 27- percent stake.

BoC is currently the country’s 16th largest bank in terms of assets.