MANILA, Philippines—Allied Bank has obtained approval from US banking regulators to cede its 27.8 percent stake in Oceanic Holdings (BVI) Ltd. to an independent trustee while divestment is being worked out, the Lucio Tan-led company said Thursday.
This approval by the US Federal Reserve removed the remaining barrier to Allied Bank’s delayed merger with Philippine National Bank, it added in a disclosure to the Philippine Stock Exchange.
Oceanic Holdings owns niche US bank Oceanic Bank based in San Francisco, California.
In separate disclosures to the exchange, Allied Bank and PNB said the US Fed approved on Oct. 28 a voting trust agreement which would allow Allied Bank to place shares of Oceanic Holdings in a temporary trust in order to facilitate the merger “in a manner that addresses US regulatory concerns.”
Previously, US banking regulators required Allied Bank to unload its minority stake in Oceanic before giving its consent to the merger with PNB.
The independent trustee will be charged with voting the shares of Oceanic and arranging for the sale of the shares to an unrelated third party or parties acceptable to the Federal Reserve Board.
With this flexibility allowed by the US bank regulators, Allied Bank and PNB said they could now proceed with the implementation of the merger.
It was earlier reported that the Lucio Tan group had nominated Walter Mix III as the independent trustee. PNB, as successor in interest in Oceanic Bank upon merger, will assume all rights and responsibilities under the voting trust agreement.
Since the announcement of the plan of merger in 2008, both banks have made significant progress among others on the following: synchronization of information technology systems; alignment of products and processes; human resource development; branch rationalization and expansion.
After the merger, PNB is expected to fortify its position as the fourth largest domestic bank in terms of total assets. It will also have the most extensive distribution network with the largest international presence among local banks.