This bank, which is doing okay in its own category (not a commercial or universal bank), is again up for grabs. We hear that this is the third attempt of the controlling group to auction off this asset.
While the bank enjoys a respectably firm footing, especially given its over six decades of operating track record, it seems that its principal investor group would like to focus on its core business.
It’s time for the owners to exit a highly-regulated, capital-intensive industry amid cutthroat competition not just with its peers but with nimble fintech players that are gnawing on traditional banks’ market share, particularly in the areas of payments and consumer lending.
But why weren’t there any takers in the past?
One of the prospective buyers previously told us that one key concern was that a big chunk of the lending portfolio relied on the affiliation with its current owner. Since the investor group is selling just the bank and not the allied business, which is its bread and butter, the buyer will have to anticipate a potential reduction in portfolio.
To prepare for the owner’s selldown or exit, there was likewise a plan to go public in the past, but this didn’t pan out. So they are back to the old route of looking for suitors.
There is always a bank looking to scale up or a new player hoping to buy a seat in the local banking circle, if the price is right. Now begins round three.
—Doris Dumlao-Abadilla
Time to buy?
It’s been a tough year even for the most conservative of stock market investors, with the benchmark Philippine Stock Exchange index (PSEi) tracking losses of 13 percent so far in 2022.
What to do? Well, the investment banking arm of the Ty family’s Metrobank Group advises clients to simply buy the dip. Doing so could earn a decent return or at least make enough money to offset disappearing buying power due to the sharp increase in consumer prices.
First Metro Investment Corp. said the PSEi could end the year at around 7,100, an upside of about 14 percent.
Thus, First Metro’s stock picks include tech proxies Globe Telecom, PLDT Inc., Converge ICT Solutions; Nickel Asia, Semirara Mining and Power Corp. (SCC) and DMCI Holdings for commodities; BDO Unibank, BPI and Metrobank—of course—for better yields; and Aboitiz Power, Aboitiz Equity Ventures, SCC, Manila Electric Co. and Synergy Grid and Development Philippines for energy.
For dividend yields, there’s DMCI and AREIT; International Container Terminal Services for logistics and trade; and the reopening plays via Jollibee Foods Corp, Bloomberry Resorts Corp., Metro Pacific Investments Corp. and First Metro’s affiliate, GT Capital Holdings.
—Miguel R. Camus
Sugar standoff
Previously, on the episode of the Sugar Regulatory Administration (SRA) leadership standoff, there has been some confusion about who should take the wheel of the agency amid challenging times (read: high retail prices and dwindling sugar stash).
Recall that Hermenegildo Serafica, the SRA chief under the administration of President Duterte, refused to vacate the post just yet until President Marcos, also agriculture chief, appoints his successor.
Adding drama to the situation is the United Sugar Producers Federation (Unifed) rallying behind Ignacio Santillana, the assigned SRA officer in charge following the issuance of Mr. Marcos’ memo.
“It is very embarrassing and proves our suspicions that Serafica has a different agenda for hanging on to a post that he should have long vacated. He has done more damage to the sugar industry than any administrator and this recent pathetic move from him shows he has a personal agenda,” Manuel Lamata, president of Unifed, said in a statement.
Serafica explained that under the law, the SRA administrator as an appointive director in a government-owned and -controlled corporation (GOCC) is not covered by the memo.
The Governance Commission for GOCCs (GCG), in response to Serafica, cited Republic Act No. 10149, which stated all appointive directors were not considered coterminous with the appointing authority. This means the official can serve in a holdover capacity until the President names a successor.
Hopefully, a new SRA administrator will be appointed soon to deal with challenges hounding the sugar industry.