BDO shelves ONB deal

BDO prexy Nestor Tan

The country’s largest lender BDO Unibank has deferred a deal to sell a 40-percent stake in Davao-based rural bank One Network Bank (ONB) to a unit of US-based global private investment firm TPG.

“The fund that was supposed to invest got used up. So they’ll have to find another fund and we decided that maybe we should not pursue it at this time because we want to move quickly. If we were to get another fund, we will wait for them again and it will delay our expansion,” BDO Unibank Nestor Tan said in a briefing on Friday.

TPG Growth, the middle market and growth equity investment platform of TPG, signed a deal in 2016 to acquire a 40-percent stake in ONB while BDO would keep a 60- percent ownership.

“It’s deferred and at some point it may push through, or it may be scrapped,” Tan said, adding that BDO had not set a timeframe on this transaction.

Asked whether BDO is looking for another strategic partner for ONB, Tan said the bank was still in touch with TPG and working with its people but is keen on moving faster into the micro, small and medium enterprise (MSME) lending business faster through ONB, a leading lender in Mindanao.

“We need to move from A to B. It’s either we start at A and B or we look at the whole thing once we get to B. In between, it’s not wise to make a move and we are in between [those points],” Tan said.

BDO acquired ONB from the Consunji family in 2015 for some P6.67 billion. This rural bank has over 100 branches and offices.

The vision for ONB is to expand MSME penetration.

“We have big ambitions for most of our businesses but we can’t be too ambitious. We have to take it one step at a time to make sure that we are able to fund our expansion,” he said.

For its part, TPG has partnered with more than 15 financial services companies across Asia. In 2008, TPG worked with Bank Tabungan Pensiunan Nasional (BTPN) of Indonesia to open more than 550 new branches and create a microloan business that grew the bank’s customer base to more than two million group lending program clients and 250,000 MSMEs.

Across its platform, TPG has invested in a wide variety of financial services companies throughout Asia, including Indonesian financial institution BFI; Janalakshmi, India’s largest microfinance institution; the Shenzhen Development Bank in China; and Union Bank of Colombo in Sri Lanka. —DORIS DUMLAO-ABADILLA