MANILA, Philippines?Retail tycoon Henry Sy?s Banco De Oro Unibank (BDO) is acquiring the local banking unit of American conglomerate General Electric Co. (GE), cementing its lead as the country?s biggest financial institution.
The bank disclosed to the Philippine Stock Exchange (PSE) Thursday that it had signed a definitive agreement to purchase GE Money Bank for an undisclosed amount. GE, in turn, will acquire a minority stake in BDO equivalent to about 1.5 percent with an option to increase this to 10 percent.
?It?s a sale and share subscription transaction since seller and buyer are different entities within the GE group,? BDO president Nestor Tan explained. ?We are very pleased to be working with GE and look forward to exploring opportunities for future collaboration.?
The sale of GE Money Bank and the entry of GE as a minority stakeholder in BDO are subject to closing conditions, including regulatory approvals, and are expected to be completed within the third quarter of 2009.
The deal appears similar to that hatched by BDO with United Overseas Bank of Singapore, when BDO took over its Philippine operations in 2005. The new acquisition, BDO?s first since taking over the former Equitable PCI Bank in 2006, will expand the local banking giant?s P801-billion asset base by another P10 billion.
?We welcome the opportunity to be partners with an institution like GE. With GE?s expertise in the financial sector, we hope this partnership will ultimately provide our customers with better consumer products and flexible financing solutions,? BDO chair Teresita Sy-Coson said.
The consolidation of GE Money Bank?s business into BDO, including its 30,000 customers, 350 employees and network of 31 branch licenses and 38 ATMs nationwide, is seen enabling BDO to accelerate the growth of its consumer banking business. As of end-March, GE Money had a loan portfolio of P6.88 billion and a deposit base of P8.46 billion.
GE, for its part, will bring in considerable value to BDO in the form of marketing, risk management and operational expertise, the PSE disclosure said.
?BDO?s superior market presence and clear strategy for growth will provide the business with the best opportunities for success. In addition, key customers and depositors will benefit from the best that both banks have to offer, with greater convenience and a wider range of products and services than ever before,? said Mark Arnold, GE Capital chief executive officer for Southeast Asia banking.
Asked by the Inquirer whether BDO will also join an upcoming bidding for a controlling stake in medium-sized Philippine Bank of Communications, Tan said they had ?no plans to participate.?
