PNB sees merger with Allied Bank this year
Philippine National Bank expects to secure the regulators’ approval of its planned merger with Allied Bank before the year ends after the Sandiganbayan denied the motion of the Philippine Commission on Good Government (PCGG) to stop the merger, said Estelito Mendoza, director and lawyer for PNB.
In a press conference Tuesday, Mendoza said there were no more legal hurdles to the long-delayed merger. Stockholders of both banks approved the merger in June 2008.
PCGG opposed the merger because it considered part of Allied Bank’s resources to be ill-gotten wealth of the Marcoses and their cronies. Both PNB and Allied Bank are majority-owned by the Lucio Tan Group.
Later, the PCGG filed a motion with the Bangko Sentral ng Pilipinas and the Securities and Exchange Commission, claiming that the merger would make it difficult for the government to recover the ill-gotten wealth.
But Mendoza said the PCGG did no more than rehash its claim on Allied Bank since the Sandiganbayan had already made a decision two years ago, declaring the merger legal.
Mendoza said Allied Bank should not be considered ill-gotten wealth.
Article continues after this advertisementIt used to be Genbank, which the old Central Bank declared insolvent in the late 1970s. Later, the Lucio Tan Group took over the shuttered bank. The Tan group’s acquisition of Genbank was upheld by the Supreme Court in 2006, Mendoza explained.
Article continues after this advertisementPNB Chairman Flor Tarriela said in the same briefing that all documentary requirements for the merger had already been submitted to the BSP, SEC, and Philippine Deposit Insurance Corp.
The regulators are expected to give their approval soon, she said.
Another hurdle to the merger was a US Federal Reserve regulation. According to the rule, Allied Bank should first divest its stake in California-based Oceanic Bank, before it can merge with PNB.
In March, Allied Bank told the Philippine Stock Exchange that its 27.8-percent stake in Oceanic Bank already had a buyer, which it identified as First National Bank of Northern California.—Michelle V. Remo
