Union Bank finalizes takeover of Cebu thrift bank

MANILA, Philippines—Aboitiz-led Union Bank of the Philippines has obtained board approval to take over 99.54 percent of 32-branch Cebu-based thrift bank City Savings Bank (CitySavings) for P5.7 billion.

In a disclosure to the Philippine Stock Exchange on Wednesday, Union Bank said it would buy the controlling stake in CitySavings from parent conglomerate Aboitiz Equity Ventures (AEV) and Pilmico Foods Corp. at 2.5 times the thrift bank’s book value.

AEV, which owns 45 percent of Union Bank, owns CitySavings together with its wholly owned subsidiary Pilmico Foods Corp.  After the acquisition, CitySavings will remain as a separate corporate entity, keeping its company name as well as its brand identity of simple and straightforward banking.

Union Bank will buy the combined 194,371 shares of AEV and Pilmico in CitySavings, marking a consolidation of the banking interests of the Aboitiz group under Union Bank.

Its acquisition of CitySavings is seen in line with Union Bank’s long-term strategy of beefing up its retail banking base and consumer-based portfolio.

Established in 1966, CitySavings has more than 300 employees, a stockholders’ equity of about P1 billion and total resources exceeding P9 billion, based on the bank’s website. It has 99,000 borrowers and a depositors’ base of about 59,000.