BDO teams up with Archipelago Capital in ONB

The country’s largest lender BDO Unibank has signed a deal to sell 15 percent of its rural banking arm One Network Bank Inc. (ONB) to a unit of Singapore-based private equity firm Archipelago Capital Partners Pte. Ltd.

In a press statement on Monday, BDO said it had entered into an agreement with Archipelago’s Osmanthus Investment Holdings Pte. Ltd., formalizing a working relationship between these parties.

Since last year, Osmanthus has helped ONB in developing the framework for its micro/small and medium enterprise (MSME) lending business, leading to the establishment of the initial pilot test sites before the end of 2017.

“The partnership with Osmanthus will further strengthen ONB’s strategic foothold in the microfinance business, and contribute to the government’s efforts at improving financial inclusion,” BDO said in the statement.

Osmanthus’ parent firm, Archipelago Capital, invests in small to mid-market companies in South East Asia. Archipelago is managed by former McKinsey and banking professionals, led by its chief executive officer Jovasky Pang, who has had extensive experience in microfinance in Asia.

Pang was previously involved in growing BOC Fullerton Community Bank into the biggest village bank group in China, and also headed the SME and Commercial business of Bank Danamon Indonesia.

BDO will retain a majority 85 percent ownership at ONB, in turn seen to provide continued financial and operational synergies to the rural bank.

Its partnership with Osmanthus in ONB is expected to accelerate ONB’s ongoing thrust into the micro-SME (MSME) market and further extend coverage of the unbanked and underserved markets.

“We believe in the vast potential of the MSME market in the Philippines and are committed to help ONB achieve a leading position in serving these customers. We are also excited by the prospect of having a partner like BDO who shares our vision of financial inclusion,” Pang said.

The transaction is subject to closing conditions and regulatory approvals. /je