Robinsons Retail Holdings to buy 4.4% of BPI
The Gokongwei-owned Robinsons Retail Holdings [RRHI 57.3 1.3%] [link] disclosed that its board had approved a complicated transaction with Arran Investment Pte. Ltd., an affiliate of Singapore’s sovereign wealth fund, that will result in RRHI buying a 4.4% stake in the Zobel-owned BPI [BPI 100.6 0.8%].
Once the transaction is completed, RRHI will own 6.8% of BPI’s outstanding stock thanks to the 2.4% stake that RRHI earned as part of the merger of BPI and Robinsons Bank that occurred in 2022.
RRHI’s President, Robina Gokongwei-Pe, said that RRHI expects to “generate more value by combining BPI’s premium banking ecosystem with the consumer-oriented ecosystem of Robinsons Retail”, and that the continued integration with BPI “simply accelerates this aspiration” of becoming a “leading retailer with excellent financial products for customers and suppliers alike”.
MB BOTTOM-LINE
Banking is normally a pretty boring business, but we’ve seen a great deal of consolidation in the banking sector over the last 12 months.
The meaning of “consolidation” in finance is a lot like the regular meaning of the word, which is to say, it’s when companies in an industry begin to combine, from an initial group of many entities of smaller size, into fewer entities of larger size.
We saw this with BPI’s reorganization with BPI Family Savings Bank, with BPI’s merger with Robinsons Bank, and with the Union Bank [UBP 89.5 0.3%] acquisition of Citigroup’s retail banking assets. Is there more consolidation to come?
I thought that the non-performing loans issue could have pushed some of the smaller banks into pre-distressed states that the larger banks could use to leverage a series of quick takeovers, but that situation never really seemed to materialize.
Neither did the wave of non-performing loans coming from rising rates on existing debt.
The banks seem generally healthy, which might make additional consolidation less likely.
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Merkado Barkada's opinions are provided for informational purposes only, and should not be considered a recommendation to buy or sell any particular stock. These daily articles are not updated with new information, so each investor must do his or her own due diligence before trading, as the facts and figures in each particular article may have changed.
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