Allied Bank says no agreement yet on entry of Chinese bank

Tycoon Lucio Tan-led Allied Bank has drawn interest from a Chinese banking giant for a potential strategic partnership but no agreement has been firmed up to date, the local bank said Monday.

In a disclosure to the Philippine Stock Exchange, Allied Bank reacted to the proposed transaction reported by the Inquirer on Monday about a prospective partnership with Industrial and Commercial Bank of China (ICBC), the world’s biggest bank in terms of market value.

“Any expression of interest by any Chinese bank was made in 2010 and nothing definite was firmed up during the exploratory discussions,” Allied Bank said in the disclosure to the exchange.

The Inquirer reported that tycoon Lucio Tan was in discussions with ICBC on a partnership that would potentially bring in the Chinese banking giant as a strategic investor.

Under the proposed framework, the Chinese firm would take over Allied Savings Bank, which, in turn, would acquire the privately owned shares held by Tan in Allied Bank.

The report about the prospective partnership, the disclosure said, was “speculative, at best.”

But banking sources privy to the transaction said that Allied Bank had allowed ICBC to conduct a due-diligence audit on certain branches that might be involved in the prospective partnership. A basic component of the team-up was that ICBC would get 30 branches in the Philippines while Tan’s group would get 10 branches in mainland China.

Philippine National Bank, which is set to merge with Allied Bank, was among the most actively traded stock on Monday. Its share surged 6.2 percent to P63.70 as the prospective entry of ICBC in Allied Bank is also seen benefiting PNB since any share that the Chinese banking giant would acquire in Allied Bank would be converted into PNB shares with the forthcoming merger between Tan’s banks.