Latest Stories

BPI inches closer to sealing deal with PNB

Ayala banking arm seen to emerge as country’s biggest


The Bank of the Philippine Islands will consolidate with Philippine National Bank, ushering in a new wave of mergers and acquisitions among local banks.

In a game-changing move, Bank of the Philippine Islands will consolidate with Philippine National Bank, ushering in a new wave of mergers and acquisitions among local banks.

BPI and PNB voluntarily suspended trading on Wednesday at the Philippine Stock Exchange after the two confirmed an Inquirer report that their shareholders were negotiating a consolidation.

To avoid strain on its capital, BPI of the Ayala group is widely expected to use its own shares as currency when it acquires PNB, which is likewise completing a merger with Allied Banking Corp.

BPI is expected to become the controlling shareholder in the union. This will catapult the Ayala bank to the top of the local banking industry.

“We confirmed discussions with the Lucio Tan Group, and will make the appropriate disclosures in accordance with the PSE disclosure rules,” BPI told the Philippine Stock Exchange.

PNB also confirmed the discussions with the Ayala group.

While BPI and PNB went on trading suspension, shares of both Ayala Corp. (+4.9 percent) and Lucio Tan Group (+1.2 percent) surged at the stock market Wedbesday. Shares of other banking players also jumped as similar plays are expected throughout the banking industry.

As the number of players becomes less, banks become even stronger,” said Jose Vistan, head of research at AB Capital Securities. “They can demand higher valuations in terms of asset values so it had an effect on other banking issues. It will probably result in the revaluation of other banks and most probably lead to similar M&As.”

Vistan said other banks with similar characteristics as PNB, like Rizal Commercial Banking Corp. (+9.9 percent), Union Bank (+1.8 percent) and East West Bank (+7.6 percent) could be the subject of M&A frenzy.

Eagle Equities Inc. president Joseph Roxas said it would be good for the Lucio Tan group to concentrate on Tanduay Holdings, leave the banking sector, and instead become an investor and “leave the management to one of the best in the (banking) business.”

Assuming that the deal pushes through, COL Financial head of research April Lee-Tan said total consolidated assets of BPI—upon consolidating with PNB and Allied Bank—would reach P1.4 trillion, or above Banco de Oro’s P1.2 trillion.

This will make BPI the largest bank in the country, while its total branch network will grow to 1,471, expanding BPI’s lead over Metrobank in terms of branch network, she said.

Metrobank had 842 branches as of end-June 2012.

“Aside from the speculation that the deal would be executed at a significant premium to PNB’s share price, we think PNB will greatly benefit from the entry of BPI,” Lee-Tan said. “BPI has an excellent track record in terms of successfully acquiring other banks. Its entry into PNB, which will eventually merge with Allied Bank, should reduce the execution risk of the PNB-Allied merger, which we think is one of the major concerns of investors notwithstanding the numerous synergies that would result from the merger of the two banks.”

Follow Us

Follow us on Facebook Follow on Twitter Follow on Twitter

Recent Stories:

Complete stories on our Digital Edition newsstand for tablets, netbooks and mobile phones; 14-issue free trial. About to step out? Get breaking alerts on your mobile.phone. Text ON INQ BREAKING to 4467, for Globe, Smart and Sun subscribers in the Philippines.

Tags: Bank of the Philippine Islands , Banking , Business , mergers and acquisitions , Philippine National Bank , Philippines

  • help_our_country

    IMHO,The Sy Group wont settle for no.2.They will acquire another banks to remain as the largest bank in the country…just my 2 cents!

    • stealth ice

      china bank is already part of henry sy’s group. just cant be merge since chinese in the binondo is against it. china bank is very much popular in binondo.

  • http://profile.yahoo.com/EDZAOON76UAIKUNC2HFCM6SIGQ eman palaman

    The oldest bank will acquire the second oldest. Just a matter of age. Lol.

  • http://twitter.com/albertjamesliu AlbertJamesLiu™


Copyright © 2014, .
To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.
Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:
c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City, Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94


  • How other faiths observe Holy Week
  • No noise, partying in Boracay on Good Friday
  • More legal woes for Cedric Lee
  • NATO ups military presence amid Russian threat
  • DOH issues official statement on confirmed case of MERS-CoV
  • Sports

  • Tenacious Iran frustrates Qatar to retain Asian Club volleyball crown
  • Floyd Mayweather is ESPN’s top-paid athlete
  • Pistorius trial: Judge sets 2-week adjournment
  • China, Taiwan rout foes for 3rd, 5th places in Asian Club volleyball
  • Ginebra’s new import Freeman arrives, makes PBA return vs ROS
  • Lifestyle

  • Are your favorite malls open this Holy Week break?
  • Celebrate Easter Sunday at Buddha-Bar Manila
  • Moriones feast: A slow, steady transformation
  • Weaving ‘palaspas’ a tradition kept alive in Tayabas City
  • Finalists announced for best translated books
  • Entertainment

  • Filipino rock icons to hold silent concert
  • Mommy Dionisia Pacquiao’s greatest hits
  • Deniece Cornejo posts bail—report
  • Miley Cyrus hospitalized, cancels US concert
  • Otaku Summer Jam 2014: Summer’s hottest J-rock/Cosplay event
  • Business

  • Russian economy hit by Ukraine turmoil
  • PSEi firms up ahead of Lenten break
  • I-Remit teams up with Lakhoo for remittances from Oman
  • Megawide nets P1.4 B in 2013
  • Longer TRO sought on rate hike
  • Technology

  • Smart phone apps and sites perfect for the Holy Week
  • Tech company: Change passwords or suffer ‘Heartbleed’
  • Filling the digital talent gap
  • SSS to shut down website for Holy Week
  • Another reason to quit social media this Holy Week: your safety
  • Opinion

  • We may never know
  • Couple of things
  • Mommy D’s magic
  • Stop bizarre and bloody Good Friday rituals
  • Holy Week taboos
  • Global Nation

  • Netizens welcome Japan’s visa-free travel plan
  • Visa-free travel by Filipinos to Japan still a proposal
  • Visa-free travel to Japan could boost tourism
  • 2 PCG men ordered arrested over Balintang Channel shooting
  • US Embassy closed on Holy Thursday, Good Friday
  • Marketplace