BPI to tap Gokongwei network to close gap with bigger banking rivals
BPI and Robinsons Bank logos
Bank of the Philippine Islands (BPI), the country’s third-largest lender, is moving into a prized business segment of its bigger rivals following the P27-billion acquisition of Robinsons Bank, part of the Gokongwei family conglomerate JG Summit Holdings.
Shareholders of the Zobel family-led BPI ratified the P27 billion merger with Robinsons Bank on Tuesday, which will modestly increase its asset base, depositors and profits and alsoo open opportunities in the lucrative Filipino-Chinese market that is dominated by Sy-led BDO Uninbank Inc. and Ty-led Metropolitan Bank & Trust Co.
“The merger will also expand BPI’s access to the network of the Gokongwei Group especially to the Filipino-Chinese market segment, which has been the significant advantage of our closest competitors,” BPI president and CEO Jose Teodoro K. Limcaoco said during the meeting on Tuesday.
BPI, established during Spain’s colonial rule in 1851 as El Banco Español Filipino de Isabel II, is part of the Ayala Corp., the Zobel-led property, banking, telecommunications and power conglomerate.
Limcaoco said they would benefit from greater access to the network of JG Summit, which owns food and drinks manufacturing giant Universal Robina Corp., property developer Robinsons Land Corp. and Cebu Pacific, the country’s top budget airline.
He said the effective date of the merger’s completion is Jan. 1, 2024.
The deal, which will give Gokongwei companies JG Summit and Robinsons Retail Holdings a 6 percent stake in BPI, will increase revenues by about 7 percent and profits by 5-6 percent, Limcaoco said.
Robinsons Retail recently closed a separate deal to acquire 4.4 percent of BPI, which will give the Gokongweis more than 10 percent ownership.
After the merger, Robinsons Bank’s 162 branches will be converted to BPI while the combined entity undertakes a broader “rationalization” of branches and operations that would not cause any job cuts.
“[T]he merger should not result in any layoffs on either side. They have an excellent workforce, we believe there is room for everyone in a merged entity,” Limcaoco said.
Maria Cristina “Ginbee” L. Go, BPI head of consumer banking, said during a press briefing on Tuesday considerations in the reorganization of the physical branch network will include the “digitalization” of the banking industry and potential redundant locations of their outlets.
BPI said the transaction and alliance with JG Summit will help it reach a goal of raising consumer loans to 30 percent of its total loan book.
Shareholders of the bank also approved the increase in its authorized capital by P4 billion to cover shares to be issued to Robinsons Bank shareholders as a result of the merger.
BPI, which has over 9.1 million depositors, ended September 2022 with total assets of P2.5 trillion.
