|
THE
Philippine National Bank (PNB) is buying 100 percent of
Allied Bank for P25.3 billion in a merger transaction
seen completed by the third quarter this year.
PNB
president Omar Byron Mier told a press conference
Wednesday the lender would issue 457 million new shares
to execute a share swap and complete the
transaction.
PNB and
Allied Bank are both majority-owned by the Lucio Tan
Group of Companies.
Mier
said the postmerger entity would retain the PNB
franchise for name recall, and the Lucio Tan Group will
have 80.7-percent majority control.
The
merged entity will make PNB the fourth-largest bank by
assets totaling P388 billion, fourth-largest in terms of
loans totaling P141 billion, fourth-largest in deposits
aggregating P197 billion and third-largest by branches
numbering 626 in all.
Since
PNB shares were valued at P36.6 billion, the total value
of the merger transaction was computed at P61.9 billion,
Mier said.
He
discounted any need for increasing the merged bank’s
capital as its capital-adequacy ratio, which measures
ability to sustain losses without folding up, stands at
19 percent, or well above the regulatory 10
percent.
International norms dictate capital adequacy of at least
8 percent, lower than that required by the Bangko
Sentral ng Pilipinas of 10 percent.
Bank
profitability was seen to slow in an initial 18-month
post-merger period in which the cost of integration was
seen to hit as high as P1.3 billion.
“We plan
no other bank acquisition after this. Our goal is to hit
return-on-equity of 15 percent by the second year post
merger,” Mier said.
Allied
Bank president Rey Maclang said the merger was made
possible by the full resolution by the Supreme Court on
the sequestered nature of a portion of the lender’s
shareholdings in the second half of last year.
He said
the merger would complement the individual strengths of
both lenders given that Allied Bank is strong on the
Filipino-Chinese community of investors and on the
small- and medium-scale entrepreneur niche.
PNB, on
the other hand, is strong not only on the corporate
front but also on local government units,
government-owned or -controlled corporations and in the
provincial areas.
Mier
said both bank’s overseas units, totaling 124 offices,
branches and subsidiaries, will be retained.
He could
not say anything definite on what will be done to the
banking license of Allied Bank which they could sell
later. |
