PNB merges thrift bank

MANILA, Philippines — Tobacco and airline magnate Lucio Tan is consolidating its banking units through the merger of Philippine National Bank (PNB) and PNB Savings Bank to further strengthen the group’s consumer lending business.

In a disclosure to the Philippine Stock Exchange (PSE), the country’s fourth largest lender in terms of assets said the bank’s board of directors approved the acquisition of the assets and assumption of the liabilities of PNB Savings Bank in exchange for cash.

It added the full integration of the bank’s wholly owned thrift banking arm is still subject to regulatory and other necessary approvals from the Bangko Sentral ng Pilipinas (BSP), Securities and Exchange Commission (SEC), among others.

The merged bank would have an asset base of P932.7 billion, as PNB’s total resources stood at P876.2 billion as of end-June and PNB Savings Bank with P56.5 billion as of end-June.

PNB is currently ranked fourth in terms of assets while PNB Savings Bank is the seventh largest thrift bank.

Outgoing president and CEO Reynaldo Maclang said the consolidation would benefit PNB Savings Bank from the ability of PNB to raise low cost funds.

“Our bank’s consumer lending business, which is being operated through PNB Savings, will benefit from the parent bank’s ability to efficiently raise low cost funds,” Maclang said.

Likewise, the integration will result in improved synergies among branch networks. The merged entity will have a domestic footprint of 707 branches including 644 PNB branches and 63 from PNB Savings Bank.

“The integration effectively enhances our competitive stance in the consumer and SME business segments,” Maclang said.

Once integration is rolled out, PNB will be able to deliver a more efficient banking experience.

“Upon full integration, PNB will be able to serve a wider customer base while the customers of PNB Savings Bank will have access to PNB’s diverse portfolio of financial solutions upon full integration,” he said.

PNB has appointed the first Filipino CEO of HSBC Jose Arnulfo Veloso as its new president and CEO starting Nov. 16.

Notwithstanding PNB Savings’ double-digit growth in assets over the years and its significant contribution to the parent’ bank’s profitability, its business can still reach greater heights through the planned integration.

PNB doubled its earnings to P5.4 billion in the first half from P2.7 billion in the same period last year, while PNB Savings Bank grew its net income by 50 percent to P348.7 million from P233 million.