Asiatrust bank ceases operations

Asiatrust Bank logo: Last glimpse

MANILA, Philippines—Asiatrust Development Bank has given up its banking license effective June 18 alongside the transfer of banking assets and liabilities to Asia United Bank (AUB).

In a disclosure to the Philippine Stock Exchange on Tuesday, Asiatrust reported that it had permanently closed and ceased banking operations pursuant to an asset sale and purchase agreement with AUB.

Effective June 18, all of Asiatrust’s branches had likewise started to operate as AUB’s branches. AUB’s takeover of the 28-branch thrift bank was in line with its aspiration to become a “stronger and more formidable” banking industry player.

Under the transaction, the 15-year-old AUB bought the banking assets and will assume the banking liabilities of Asiatrust. It increased the total resources of AUB, a medium-sized commercial bank, by more than P4 billion and expanded its nationwide network to 102 branches.

This transaction marked AUB’s third acquisition in three years. In 2009, AUB took over Rural Bank of Angeles, which had four branches and two satellite offices in Pampanga, boosting its presence outside Metro Manila. AUB’s acquisition of the Cooperative Bank of Cavite is awaiting BSP approval.

As of end-2011, AUB had assets of P50 billion and capitalization of P9 billion. Its return-on-equity ratio is at 12 percent, ranking it among the most profitable commercial banks in the country.

AUB is owned by a group of Filipino, Taiwanese and Singaporean investors engaged in property development, manufacturing and other equity ventures. Republic Biscuit Corp. (Rebisco), the Philippines’ leading manufacturer, distributor, and exporter of snack food products for the past 49 years, is the biggest shareholder of the bank.

For its part, shareholders of Asiatrust earlier approved a change in its corporate name to “NextGenesis Holdings Corp.” The primary and secondary purposes of the corporation were also approved to be amended from a bank to a holding company.

With this transaction, Asiatrust shareholders can keep the publicly listed holding company but they were required to give up the banking license. However, they can still unlock some values out of NextGenesis by either selling it to new investors that are searching for a backdoor listing ticket on the local stock exchange or infusing nonbank-related businesses.