Bank of Commerce to get add’l P5.5 Billion

MANILA, Philippines — San Miguel Corp. (SMC) will infuse additional equity into affiliate Bank of Commerce in line with the lender’s bid to become a universal bank.

“The board of directors of San Miguel Corp. approved to make an additional equity investment in Bank of Commerce amounting to P5.5 billion in support of the application of Bank of Commerce for an upgrade of its commercial banking license to a universal banking license,” SMC said in a disclosure to the stock exchange.

Bank of Commerce, the banking arm of the SMC Group, is raising its capital in its bid to obtain a universal bank license.

Amid growing competition in the industry, the banks plan to grow bigger.

Roberto Benares, president and chief executive officer of Bank of Commerce, earlier said the bank was raising its capital base in light of the integration of the banking industry in the Association of Southeast Asian Nations (ASEAN).

He underscored the need for the bank to get bigger, stronger and better in the face of ASEAN integration and rigid competition.

A unibank status can give banks the flexibility to expand services and grow its presence to achieve scale, Benares said.

Under the ASEAN banking integration framework (ABIF), Indonesia, Malaysia, Philippines, Singapore and Thailand should conclude at least one bilateral agreement with another ASEAN member country.

By 2020, ABIF targets the conclusion or near conclusion of at least one bilateral agreement for each of the 10 ASEAN members as part of the integration under the ASEAN Economic Community (AEC).

Bank of Commerce ranked 15th in terms of capital with P15.36 billion and 17th in terms of assets with P136.84 billion. It placed 16th in terms of deposits and loans with P117.49 billion and P61.6 billion as of the end of  2016, respectively.

The BSP allows universal banks to engage in underwriting and other functions of investment houses and to invest in equities of non-allied undertakings in addition to the function of an ordinary commercial bank.

Bank of Commerce is one of the country’s progressive commercial banks that started operations in 1963. In 2008, SMC invested in the bank that has now close to 130 branches nationwide.