Ayalas, Gokongweis to merge bank units

MANILA, Philippines — A possible merger is in the works between Ayala-led Bank of the Philippine Islands (BPI) and Robinsons Bank Corp. (RBC) of the Gokongwei Group to form the country’s second largest lender in terms of assets.

Through a share swap agreement, an industry source said the Gokongweis would likely end up with a six percent stake in the 171-year-old bank led by the Ayala Group.

The board of directors of the Gokongwei-led bank is set to approve the execution of an agreement between Robinsons Retail Holdings Inc., JG Summit Capital Services Corp. and BPI.

BPI confirmed it was in talks with Robinsons Bank over a potential collaboration.

“Please be informed that we are in discussions on a potential collaboration between BPI and Robinsons Bank. Further disclosures will be made at the appropriate time,” the bank said in a statement.

Under the planned consolidation, BPI would emerge as the surviving entity. BPI has close to 900 branches and more than 2,500 ATMs, while RBC has about 150 branches and 354 ATMs.

The transaction is subject to the approval of shareholders as well as regulators, including the Bangko Sentral ng Pilipinas (BSP), Securities and Exchange Commission (SEC), Philippine Deposit Insurance Corp. (PDIC) and the Philippine Competition Commission (PCC).

Official data from the central bank showed that BPI is the third largest private bank in the country in terms of assets, with P2.35 trillion, and second in terms of capital, with P297.37 billion as of end-March.

On the other hand, RBC is 17th in terms of assets, with P175.9 billion, and 15th in terms of capital, with P16.74 billion. It is part of the empire of the late taipan John Gokongwei.

With the merger, BPI and RBC would emerge as the second largest bank in terms of assets, with a combined asset base of P2.52 trillion, overtaking Ty-led Metropolitan Bank & Trust Co., with P2.38 trillion as of end-March.

In an article posted on spot.ph that was later taken down, RBC resident and CEO Elfren Antonio Sarte was quoted as saying “this is a good opportunity to augment RBC’s captured niche markets and consolidate that with the BPI ecosystem.”

“This merger is a testament to the mutual respect and excellent business relationship between the Gokongwei Group and Ayala Group. We will work with BPI to ensure a smooth transition and integration of our clients and operations into BPI. Together, we will maintain quality banking services and offer additional top-notch and innovative products to all RBC customers,” Sarte was quoted as saying in the article.

Spot.ph is part of Summit Media owned by the Gokongweis.

Another industry source said the transaction benefits the Gokongwei Group as the book value of BPI, the basis for the swap-share arrangement, is triple that of RBC, which is not listed in the Philippine Stock Exchange (PSE).

The source added that BPI is after the digital banking license of GoTyme Bank, which was one of the six entities awarded digital banking licenses by the BSP. The Gokongweis own a 60 percent stake in GoTyme while Singapore-based digital banking group has the remaining 40 percent.

“I think that is why BPI is after Robinsons Bank is because of GoTyme,” the source said.

Officials of both banks could not be reached for comment.

The shares of BPI declined by 30 centavos to close at P90 per share yesterday. About 2.51 million shares of BPI worth P225.89 million changed hands Thursday.