BPI takes control of BanKO

Ayala-led Bank of the Philippine Islands has taken full control of BanKO, the country’s first mobile-powered microfinance-oriented savings bank, by completing the buyout of shares held by its parent conglomerate and telecommunications affiliate.

In a disclosure to the Philippine Stock Exchange on Wednesday, BPI, Ayala Corp. and Globe Telecom announced the closing of the deal to sell to BPI all the shares in BanKO held by Ayala and Globe. The deal raised BPI’s equity in BanKO from 40 percent to 100 percent.

BPI now seeks to make BanKO a more meaningful vehicle for financial inclusion and lender to “underserved” households.

“We are currently piloting a new credit model that will support the financial inclusion mandate of BanKO,” Natividad Alejo, BPI executive vice president and head of retail clients and president of BPI Family Savings Bank, said in a text message yesterday.

BanKO had accomplished a lot on the transactions side even at its start-up phase, generating more than a million customers but only on the deposit-taking side of the business. Its loan portfolio remained small in relation to BPI’s. With full control of the thrift bank, BPI now seeks to expand the lending activities of this unit.

Around a quarter of households in the Philippines are estimated to fall into the “underbanked” category, referring to people who are able to maintain deposit accounts but are unable to borrow and are thus forced to operate in the informal channel or borrow from informal lenders at prohibitive interest rates.