MANILA, Philippines?Diversifying conglomerate San Miguel Corp. vowed Monday to recapitalize and strengthen its Bank of Commerce unit as part of the group's thrust to expand its presence in the banking industry.
In particular, SMC president and COO Ramon S. Ang unveiled plans for the bank to work closely with Petron Corp.-another company that SMC now controls-to expand its market presence through the petroleum refiner's gas pump station network.
"There are a lot more banking services that Bank of Commerce can provide San Miguel, but we need to invest and upgrade the bank's IT systems, management capability and branch locations to make the bank more responsive and compatible to our business needs," Ang said in a statement.
He did not disclose the extent to which SMC would recapitalize the bank, but industry sources said at least "a few billion pesos" would be needed for the bank to implement the plans laid out by Ang.
A banking industry source said that under SMC's aegis, the commercial bank has revived its long-shelved plan to upgrade its license to that of a universal bank.
"The expansion plan includes new branches, acquisitions, new business lines and a universal bank license," he said. "This will allow it to compete with the big boys."
Ang said he had three strategic priorities for Bank of Commerce, which include aligning its operations "to reflect a new commercial strategy" of servicing SMC clients and business partners; growing the bank's current base of customers, and strengthening the bank's capital position.
He sees an opportunity for the bank to work cooperatively with the conglomerate?s other businesses.
"We see potential projects we can pursue with Petron," he said. "There's a fit between retail banking and Petron's retail network of over 1500 service stations."
SMC, through property arm San Miguel Properties Inc., and SMC's retirement fund secured a controlling 51-percent stake in Bank of Commerce following an additional P2-billion equity infusion in May.
Since acquiring a stake in Bank of Commerce in 2008, San Miguel has worked with the bank's management to provide SMC banking services such as cash management and payroll servicing.