The Ayala Group’s Bank of the Philippine Islands (BPI) will ratify the P26-billion acquisition of the Gokongwei family’s Robinsons Bank Corp. in a meeting with stockholders on Jan. 17 next year.
The banking giant is seeking the approval of its stockholders while planning to implement a capital increase to support the merger, which the parties plan to complete before the end of 2023.
Announced last September, the transaction allows BPI to gain control of the smaller Robinsons Bank’s network and assets. This also includes a 20-percent stake in GoTyme, the Gokongwei digital bank venture with multinational financial group Tyme.
Robinsons Bank shareholders, JG Summit Holdings and Robinsons Retail Holdings of the Gokongweis will gain a combined 6-percent stake in BPI. This was valued at about P26 billion, based on the current share price.
Part of the next meeting’s agenda was to approve an increase in capitalization to support the planned takeover.
Last September, the lender’s board approved an increase in its authorized capital by P4 billion to P54.6 billion. The amount will be divided into 5.4 billion common shares and 60 million preferred shares.
The Fitch Group’s financial research firm CreditSights said the deal was a positive step for BPI as both banks were aligned in terms of strategy given Robinsons Bank’s strong portfolio of retail and small- and medium-sized enterprise loans.
Large capital requirements
“Both banks also have in common a sensible focus on digitalization; BPI has rolled out several new digital platforms and established partnerships with GCash and Alipay+, while Robinsons Bank together with other Gokongwei entities own a 60-percent stake in one of the six licensed digital banks in the Philippines,” CreditSights said.
“Post-transaction, BPI would be able to play in the digital bank space as well, which would further aid its push into retail,” it added.
Billionaire Lance Gokongwei said last September the decision to sell Robinsons Bank was mainly due to the large capital requirements needed for expansion.
“[W]e are cognizant that banking is a scale game and will continue to require additional capital for growth,” said Gokongwei, who is CEO of the family conglomerate JG Summit, which has businesses in manufacturing, airlines, property, petrochemicals, energy and telecommunications.
“We believe that merging Robinsons Bank with BPI, which is one of the strongest and most profitable banks in the country, is the best path forward,” he added.
BPI ended the first half with assets of P2.46 trillion against P176 billion for Robinsons Bank.