Rebisco’s Asia United Bank takes over Asiatrust

Asia United Bank of the Rebisco group has inked a deal to take over the banking operations of thrift bank Asiatrust Development Bank, after two years of negotiations.

Under the transaction, which is targeted to be completed within the first half of this year, AUB will acquire the banking assets and assume the banking liabilities of Asiatrust without effecting any change in the latter’s shareholder base.

The trust assets of Asiatrust, estimated by well-placed banking sources at about P250 million, will be excluded from the takeover deal.

The acquisition will add about P6 billion to the balance sheet of AUB, a medium-sized commercial bank, which currently has P52 billion in resources.  The transaction will likewise contribute 28 branches to AUB’s existing network of 74 branches.  Of Asiatrust’s total branches, 18 are in Metro Manila, still the biggest market for financial services in the country.

“The acquisition of the Asiatrust banking business will allow us to deliver the AUB brand of service commitment and excellence to more clients within a short period of time,” AUB president Abraham Co said in a statement late Wednesday.

“We are happy to entrust our customers to a strong, highly profitable and growing bank, which has a proven track record in operational integration and is at the forefront of enhancing customer service experience.  We will work closely with AUB towards a smooth transition,” Asiatrust vice chair Roland Garcia said.

Asiatrust president Dionisio Ong added that the integration of Asiatrust into AUB would allow Asiatrust’s customers to access a wider distribution network and more product offerings.

ING Bank NV acted as financial advisor to Asiatrust on this transaction.

Banking sources privy to the deal said this was structured this way—via the purchase of assets rather than shares—so that Asiatrust’s shareholders would be “left with something” after AUB’s takeover while AUB would avoid  additional contingent liabilities.

The controlling shareholder group of Asiatrust is the Garcia family but this thrift bank also has the Social Security System and Asian Development Bank among its strategic investors, respectively accounting for 19.13 percent and 7.55 percent based on the bank’s latest report of top 100 shareholders.

About 32 percent of the bank’s shares are held and traded by the public but trading of the shares of Asiatrust had been suspended at the Philippine Stock Exchange since November 2010, when it entered into advanced negotiations with investors.

AUB is a small but profitable commercial bank backed by the financial muscle of its principal shareholders led by biscuit and real estate magnate Jacinto “Jack” Ng of Republic Biscuit Corp.

Ng also owns the hotel/service apartment property managed by Oakwood in Ortigas.  He is among the 40 richest men in the country based on Forbes’ ranking last year, with an estimated net worth of $115 million.