EastWest Bank buys Green Bank of Caraga
MANILA, Philippines—Gotianun-led EastWest Bank is set to acquire the 46-branch rural bank Green Bank of Caraga, gaining a foothold into the microfinance business.
The acquisition, which has been approved by the Bangko Sentral ng Pilipinas, has brought back EastWest into the banking merger and acquisition (M&A) arena two years after taking over AIG Philam Savings Bank.
The consolidation of Green Bank into its books will add close to P3 billion in assets to EastWest, which ended the first semester with P83.1 billion in resources and P9.7 billion in capitalization.
“This is another milestone for EastWest Bank as this acquisition marks our full entry into the small and micro-finance arena,” said EastWest president Antonio C. Moncupa Jr.
“Through this acquisition, EastWest Bank will be able to provide this under served segment wider access to innovative products and delivery channels,” Moncupa added.
Microfinance refers to the provision of financial services such as loans, savings, and insurance to the entrepreneurial poor.
“We intend to create synergies in the branch channel by finding areas of cooperation between the two banks within the regulatory framework. We think that over time, it will be optimal to integrate most of the Green Bank branches into EastWest even as Green Bank continues to pursue its focus to serve small and micro enterprises,” Moncupa said.
In 2009, EastWest boosted its consumer lending business with the acquisition of the consumer finance units of AIG bundled into AIG Philam Savings Bank. Prior to that M&A, it gobbled up Ecology Savings Bank Inc. in 2003.
EastWest, a subsidiary of publicly listed Filinvest Development Corp., posted a first-semester net profit of P884 million, up by 3.1 percent from a year ago, as higher earnings from lending activities offset a much-anticipated slowdown in trading gains.
This brought EastWest Bank’s return-on-equity for the first half of the year to 18.1 percent and return on assets at 2.3 percent, one of the best-performing in the banking industry.
