Financial Intelligence Philippines

Land Bank of the Philippines (Filipino: Bangko sa Lupa ng Pilipinas), also known as LANDBANK or by its initials, LBP, is a bank in the Philippines owned by the Philippine government with a special focus on serving the needs of farmers and fishermen. While it provides the services of a universal bank, it is officially classified as a “specialized government bank” with a universal banking license.

LANDBANK is the fourth largest bank in the Philippines in terms of assets and is the largest government-owned bank. It is also one of the biggest government-owned and/or controlled corporations in the Philippines.

Unlike most Philippine banks, LANDBANK has an extensive rural branch network. It services many rural sector clients in areas where banking is either limited to rural banks or is non-existent.

LANDBANK was established on August 8, 1963 as part of the Agricultural Land Reform Code, or Republic Act No. 3844 to help with land reform, especially the purchase of agricultural estates for division and resale to small landholders and the purchase of land by the agricultural lessee. In 1965, LANDBANK’s by-laws were approved and its first board of trustees was formed, with the Secretary of Finance as chairman.

On October 21, 1972, Presidential Decree No. 27, signed by then-President Ferdinand Marcos, emancipated all tenant farmers working on private agricultural lands devoted to rice and corn, whether working on a landed estate or not. The system was implemented through a system of sharecropping and/or lease-tenancy. Landbank was tasked to collect 15-year land amortizations from beneficiaries at the cost of the value of the land plus six percent interest per annum.

By 1973, LANDBANK was in financial distress. It lacked the resources and the capital needed to implement the land reform programs and lacked the structure to implement the programs efficiently. On July 21, Marcos signed Presidential Decree No. 251 which revitalized the bank. The decree granted LANDBANK a universal banking license (the first bank in the Philippines to be issued such a license) with a social mission to spur countryside development. The decree expanded LANDBANK’s powers to include lending for agricultural, industrial, homebuilding and home-financing projects and other productive enterprises, as well as lending to farmers’ cooperatives and associations to facilitate production, marketing of crops and acquisition of essential commodities. LANDBANK was also required by the decree to provide timely and adequate support in all phases involved in the execution of agrarian reform and also increased its authorized capital to 3 billion pesos. It also became exempted from all national, provincial, city and municipal taxes and assessments.

LANDBANK was reorganized in 1977 when it was divided into three sectors to better assess the needs of its customers. It was divided into Agrarian, Banking and Operations sectors to strengthem operations and ensure long-term viability.

In 1982, the Agricultural Credit Administration (ACA), established under the same law as Landbank, was abolished and all its assets and functions transferred to Landbank. ACA’s function was to extend credit to small farmers. Also in this year, Union Bank of the Philippines (UnionBank) was formed, with LANDBANK having a 40-percent stake in the government-owned commercial bank.

LANDBANK became the financial intermediary for the Comprehensive Agrarian Reform Program (CARP) in 1988. It was also in that year that UnionBank started a gradual privitization. The Aboitiz Group of Companies acquired LANDBANK’s 40% share of UnionBank then which it continues to own. LANDBANK also became the third member of Expressnet, an interbank network, in December 1991.

On February 23, 1995, LANDBANK’s charter was once again amended. Its authorized capital was increased to nine billion pesos and it became an official government depository. The number of members of the board of trustees was also increased to nine. On August 25, 1998, LANDBANK’s authorized capital was once again increased to 25 billion pesos.

Landbank is divided into the following subsidiaries and affiliates:

* LBP Countryside Development Foundation
* LBP Insurance Brokerage
* LBP Leasing Corporation
* LBP Realty Development Corporation
* Masaganang Sakahan, Inc.
* National Livelihood Support Fund
* People’s Credit and Finance Corporation

Landbank of the Philippines Official Website

http://www.landbank.com/

The Rizal Commercial Banking Corporation (RCBC, PSE: RCB) was established in 1960 as a development bank and is licensed by the Bangko Sentral ng Pilipinas (BSP) for both commercial and investment banking. It is the Philippines’ fifth-largest bank by assets, with total consolidated assets of about P185 billion (or US$3.6 billion) as of end-December 2005.

RCBC opened for business as a small development bank in 1960, then went through rapid expansion to become the preferred banker to a wide range of markets: the Filipino-Chinese market, the corporate market, locators in the export processing zones, the middle market, and the consumer/ retail market.

In 1964, RCBC marked a significant presence in the Filipino-Chinese business community with the opening of its first branch in Binondo. In 1967, this foothold was strengthened when Ambassador Alfonso T. Yuchengco, founder of the Yuchengco Group of Companies (YGC), assumed the Chairmanship of the board. Because of his strong ties with the Filipino-Chinese business community and the Bank’s excellent record in serving this market, the Filipino-Chinese market has remained to be one of the Bank’s major market niches.

The 1970s
In 1973, Chairman Yuchengco deemed it crucial to invite two international banks to raise the level of banking expertise of RCBC in trade financing, international banking, credit control, and systems and procedure to global standards. These were the Continental Illinois National Bank and Trust Co. of Chicago, USA (CONNILL) and The United Financial of Japan. The tie-up with these banks reinforced the role of RCBC among corporate clients who preferred institutions with international banking expertise. Further, the affiliation with The United Financial of Japan opened another market for RCBC: the Japanese market. Together, the corporate, the Filipino-Chinese and Japanese markets account for a substantial share of the Bank’s portfolio.

The 1980s
The period marked the rapid branch expansion for the Bank. While most of its peers were establishing branches within Metro Manila, RCBC pursued branch expansion in key growth areas like the export processing zones. This enabled the bank to tap and forge long-term relationships with the foreign locators especially those in the semiconductor industry.

Anticipating bigger things to come, RCBC successfully listed its shares in the Philippine Stock Exchange in 1986. The following year, RCBC diversified into the retail market with the introduction of private banking, home mortgage, car financing and the RCBC Credit Card.

The 1990s
The establishment of the RCBC’s thrift bank arm – the RCBC Savings Bank in 1996 was an indication of RCBC’s strategic thrust of becoming a major player in the retail market. This has been supported by the acquisition of a large thrift bank – the Capitol Development Bank in 1998 and the acquisition of 67% stake in Bankard, a major player in the credit card business in mid-2000.

The expanded branch network of 287 branches and 5 extension offices, the opening of foreign offices in Hong Kong (RCBC International Finance, Ltd.) in 1979, in the US (RCBC California International, Ltd.) in 1993 and in Italy (RCBC Telemoney Europe) in 1995 and affiliations with offshore banks and money transfer agencies, stabilized the position of RCBC in the remittance business. The Bank now accounts for more than 10% of the remittance business.

On top of a highly rewarding banking business, the bank has equity holdings in companies engaged in power generation, automotive assembly, thrift banking, food manufacturing, etc. These companies are deemed leaders in their respective niches and are in industries with long-term growth potentials. RCBC entered into a joint venture agreement with Honda Cars and Mitsubishi Corp. of Japan and the Ayala Group to produce the well-engineered and popular Honda cars for the Philippine market. Together with another Yuchengco Group flagship, the House of Investments, and the Enron Corp., it put up the Subic Power Corp. (SPC), a diesel-fired 116-megawatt power plant built under the Build-Operate-Transfer scheme.

To strengthen its position in the capital market, the bank fully acquired the Philippine Pacific Capital Corp. from its partners and renamed it RCBC Capital Corp. It entered into a joint venture agreement with Isuzu Corp., Mitsubishi Corp. and the Ayala Corp. to form Isuzu Motors Phils. Co., Ltd., which is into the assembly, manufacturing, importation and distribution of AUVs, pick-ups and medium- and big-sized trucks and buses. It has equity participation in Pilipinas Shell Petroleum Corp. In November 1996, RCBC joined Agila Holdings, Itochu and Hacienda Luisita in putting up the Luisita Industrial Park Corp., a 300-hectare industrial park for Japanese investors. Together with Great Pacific Life Assurance Corp., it forged a tie-up (1997) with Japan’s largest life insurance company, the Nippon Life Insurance Corp., forming a new joint venture life insurance company – the Nippon Life Insurance Company of the Philippines. Other equity investments of RCBC are in LGU Guarantee Corp, a joint BAP/DBP guarantee institution to cover 85% of local government’s unit debts; in Lima Land, Inc., a real estate company involved in the development of a 440 hectare industrial park in Lipa/ Malvar; in KG Investments Holdings, Ltd. with the Koo family and in RCBC Land, Inc., a joint venture between RCBC and Pan Malayan Management and Investments Corporation. The company’s maiden project is the RCBC Plaza, the new home of RCBC. The project is a joint venture with the Government (of Singapore) Investment Corporation.

Present
RCBC’s long-term objectives are to maintain and further enhance its position as one of the leading universal banks in the Philippines, to be a dynamic financial institution that will be the preferred choice of selected target markets, to achieve an optimal increase in the Bank’s capital, and to increase shareholder value. To achieve these, the Bank defined the key strategic areas in which efforts and initiatives will be focused on in the highly challenging borderless banking landscape of the new millennium.

First is through leadership in identified markets: economic/ export zones, consumer lending, the middle loan market, treasury services, asset and cash management services for corporate and retail markets and the overseas remittance business. These are growth areas where the bank has core competencies and areas that would complement its core markets, network and affiliations.

Second is through continued synergy with members of YGC and by drawing experience from years of affiliation with the United Financial of Japan. As a member of the YGC group, RCBC forms part of a financial services conglomerate with strong market competitiveness in insurance and other risk management services. Through this alliance, the bank is able to broaden its network and delivery channels inasmuch as the more than 40 companies forming the YGC group present a huge base of existing and potential clients for consumer banking and finance, treasury, trust and investment services. By synchronizing the group’s products and services and its marketing and delivery, RCBC will be able to deepen its products and services and provide greater value-added to all its clients. Likewise, RCBC’s long years of partnership with one of Japan’s and the world’s biggest financial conglomerates provided it with the experience and expertise to strengthen competitiveness among Japanese clients and foreign locators in the country’s export zones.

Third is through continuing realignment of the Bank’s business divisions. By clearly delineating the markets served in each business division, the Bank is able to allocate resources appropriately, strengthen its relationships with key clients and focus business divisions on key areas that will drive revenue growth, enhance distribution capabilities and allow the Bank to offer a broader range of products and services to its target markets.

Fourth, the Bank shall focus on strategies to improve cost efficiency and achieve service excellence. Wherever possible, back office functions and other support processes are moved out of business centers and centralized in processing centers such that business centers become strong competitive sales outlets with seamless support from the back office and information technology systems. To support these initiatives and to provide a platform for the delivery of new products and services, investments in information technology will continue to be a key strategy.

Fifth, the Bank will continue to pursue enterprise-wide risk management initiatives to ensure the Bank’s continued strength and viability in the face of multifarious risks that are present in the various core businesses of banking. It will continue to adopt sound corporate governance practices and structure to promote the continued good health of the Bank for the benefit of all stakeholders.

Official Website of Rizal Commercial Banking Corporation

http://www.rcbc.com/

Bank of the Philippine Islands (Spanish: Banco de las Islas Filipinas, commonly known as BPI; PSE: BPI) is the oldest bank in the Philippines still in operation and is the country’s third largest bank in terms of assets, the country’s largest bank in terms of market capitalization, and the country’s most profitable bank. It is owned by the Ayala Corporation – the largest conglomerate in the Philippines, and is based in Makati’s Central Business District, on the corner of Ayala Avenue and Paseo de Roxas.

BPI is also the oldest bank in Southeast Asia and has a long and distinguished history that spans over a century. It has either influenced or has been influenced by many nations, including parts of the former Spanish Empire, especially Mexico, and the United States. While it is considered by many as an old institution, BPI is trying, with moderate success, to promote itself as a dynamic institution that caters to its various clients, which hail from various sectors of Philippine society.

BPI also pioneered rural banking in the Philippines, as its countryside banking operations preceded that of many other banks’ rural banking operations by many years. Today, it maintains a large rural branch network, with some branches dating bank to the Spanish or American colonial periods. Its branch network of 831 branches is by far the largest branch network of any bank in the Philippines.

The bank has received several awards from various financial magazines, such as Euromoney the Far Eastern Economic Review, The Banker, Euromoney, Finance Asia, and Global Finance . Its most recent award was from Asiamoney. In April 2010, which the bank was awarded as the Philippines’ Strongest Bank. In 2009, the bank bags 10 awards as the Best Domestic Bank; Best Local Cash Management Bank in the Philippines as voted by Small-Sized Corporations; Best Local Cash Management Bank in the Philippines as voted by Medium-Sized Corporations; Best Local Cash Management Bank in the Philippines as voted by Large-Sized Corporations; Best Domestic Provider of FX Services in the Philippines as voted by Corporates; Best Domestic FX Provider of FX Prime Broking Services in the Philippines as voted by Corporates; Best Domestic FX Provider of Single-Bank Electronic Trading Platform.

BPI was established on August 1, 1851 as the Banco Español- Filipina de Isabel II (Spanish-Filipino Bank of Isabel II), named after the queen of Spain, Isabella II, the daughter of former king Ferdinand VII. The bank was the second Philippine bank during the Spanish era after a bank was founded by Francisco Rodriguez, a Filipino Quaker based in London, in 1830. Today, Rodriguez’s bank no longer exists.

The royal decree establishing the Banco Español-Filipino also gave it the power to print Philippine currency, the first time the Philippine peso was printed in the country (before 1851, a multitude of currencies were used, most notably the Mexican peso). They were originally called pesos fuertes (PF), or “strong pesos”. First printed on May 1, 1852, they were reedemable at face value for gold or silver Mexican coins. The first deposit with the bank was also done on that day by a man named Fulgencio Barrera. Three days later, a Chinese man named Tadian became the first borrowing client of the bank after the bank discounted to him a promissory note amounting to ten thousand pesos fuertes.

On September 3, 1869, following a revolution which overthrew Isabella II, the name was changed to Banco Español-Filipino. In January 1892, the bank moved from the Royal Custom House in Intramuros to the new business district of Binondo, north of the Pasig River after it found out that Intramuros was becoming “economically inactive”. It moved to 4 Plaza Cervantes, which was at that time a prime property owned by the Dominican friars.

The first branch of Banco Español-Filipino outside Manila was opened in Iloilo on March 15, 1897. However, the idea to set up branches outside Manila was formulated as far back as the 1850s, with the first branch planned to be opened in Bacolor, the capital of Pampanga at the time. But by then, Iloilo and other provinces in Panay became more productive than Pampanga in the sugar industry, hence the move to open the first branch in Iloilo, which was then the Queen City of the South.

Following the cession of the Philippines to the United States following the signing of the 1898 Treaty of Paris, the bank changed from a Spanish institution to a Philippine one. On January 1, 1912, a decision by the shareholders of Banco Español-Filipino changed the name to the present Bank of the Philippine Islands (BPI), or Banco de las Islas Filipinas in Spanish. The basis for the name change was Act No. 1790, passed on October 12, 1907, which permitted the bank to change its name. The bank was also privatized during the American colonial period.

Following World War II, BPI was actively involved in the post-war reconstruction of the Philippines. In 1949, with the establishment of the Central Bank of the Philippines (now the Bangko Sentral ng Pilipinas), BPI (and other banks issuing Philippine currency) lost the right to issue Philippine pesos, a right it had since the Spanish colonial era and (with competition from other banks) during the American colonial period.

In 1969, Ayala Corporation, which had been affiliated with BPI since its establishment in 1851, became the dominant shareholder of BPI and eventually made BPI into the flagship of Ayala’s financial entities.

Starting in the 1970s, BPI has been involved with many mergers and acquisitions. The first merger occurred in 1974 with BPI’s acquisition of the People’s Bank and Trust Company. Major notable acquisitions include Citytrust Savings Bank, a unit of Citibank, in 1996 and Far East Bank and Trust Company on April 7, 2000. The merger with Far East Bank is arguably the largest in Philippine banking history. In 2002 with the acquisition of DBS Bank Philippines, a subsidiary of DBS Bank. However, the BPI-DBS deal permitted DBS Bank to hold a stake in BPI. The latest acquisition occurred in 2005 with the acquisition of Prudential Bank.

In 1982, BPI became a universal bank, and in 2000, became the Philippines’ first bancassurance firm, being the first Philippine bank to offer insurance services after acquiring the insurance companies of the Ayala Group, the parent company of the Ayala Corporation. Within that year, BPI also founded the BPI Direct Savings Bank, an Internet bank, which launched BPI into 21st century banking.

Today, BPI has maintained a leadership position in consumer banking, trust banking and asset management, corporate banking/corporate finance and bancassurance. BPI boasts of having the country’s largest combined network of branches/kiosk units and ATMs: over 830 branches with over 1,700 ATMs. 20,000 point-of-sale terminals nationwide to support its delivery of services, with over 300 corresponding banks worldwide, with 11,925 employees servicing more than 3 million depositors. Its asset management division – BPI Asset Management, is the industry leader and country’s largest in trust and investment management with over P490 billion (US$11.26 billion) in total assets under its asset management division alone as of December 2010. Total assets reached P877 billion (US$19.71 billion) as of December 2010. BPI managed total funds (deposits – [P720 billion] and trust assets – [P490 billion] combined as of December 2010) amounting to P1.21 trillion (US $27.82 billion), making it the country’s second largest in the banking industry.

BPI was named as the Top Commercial Bank for OFW Remittances for the third year in a row and was elevated to the BSP Hall of Fame. This outstanding performance in the remittance services was replicated in 2008 as volume picked up by another 35.4%, well ahead of the industry growth rate.

Aided by the bank’s risk management policies, BPI was the only major bank with no exposure to Lehman Brothers, AIG and the subprime mortgage industry. The bank also ably managed market risks by adhering to prudential Value at Risk (VAR) limits and reduced its trading books by 21%. Net 30-day non-performing loans ratio (BSP version) improved to 2.9%, and non-performing assets dropped below 10%.

In December 2008, BPI issued P5.0 billion (US$105.26 million) in 10-year subordinated debt eligible as Lower Tier 2 capital out of a BSP-approved P15.0 billion (US$315.79 million) issuance. The issue was well received and fully subscribed. Yearend capital was lower at P63.9 billion (US$1.35 billion), as actual dividend payments of P8.0 billion (US$168.42 million) exceeded the net income for the year and on lower market valuation of securities. Overall capital adequacy ratio of 14.1% remained sufficient and well above the 10% regulatory minimum.

BPI’s market capitalization stood at P210.0bn (US$4.83 billion), the highest among the listed banks, notwithstanding the 24.9% drop in the stock price. The bank retained its CAMELS 4 rating in the annual BSP examination, and was assigned a National Long-term Rating of AAA(phl) rating by FitchRatings.

On December 8, 2010, BPI bagged a deal to take over the local fund management business of Dutch financial giant ING. That deal will turn the Ayala-led bank into an investment powerhouse. Making its first major acquisition since the buyout of Prudential Bank from the Santos family in 2005, the 159-year-old BPI will soon manage P78.4 billion in assets currently under ING Investment Management’s care, making BPI the country’s largest investment house. Under the terms of the agreement, BPI will acquire 100 percent of ING Bank Manila’s trust assets. The acquisition is subject to certain conditions, including regulatory approvals.

BPI also maintains a specialized network of remittance centers for servicing overseas remittances from contract workers and other Filipinos working abroad. At present, BPI has remittance centers and desks located in Hong Kong, USA and Europe.

For years, international publications and rating agencies have given annual awards to BPI as one of the best banks in the region. Among these are the Far Eastern Economic Review, The Banker, Euromoney, Asiamoney, BusinessWeek, The Asset, Global Finance, Finance Asia, Alpha Southeast Asia, and The Asian Banker.

BPI has been consistently cited for its above-average profitability, sufficient capital/assets, low-cost funding base and manageable non-performing loan levels. Fitch Ratings noted that BPI has a comprehensive risk management which is superior to that of its peer banks, and this serves as an important element in keeping BPI better positioned in Philippine banking in the years ahead.

Official Website of Bank of the Philippine Islands
http://www.bpiexpressonline.com/

The Metropolitan Bank and Trust Company (PSE: MBT), commonly known as Metrobank. It has a diverse offering of financial services, from regular banking to insurance. Metrobank is the second largest bank in the Philippines.

Metropolitan Bank and Trust Company (Metrobank) was established by a group of businessmen on September 5, 1962 at the Wellington Building in Binondo, Manila. In August 1963, the bank’s first branch was established in Divisoria. Four years later, Metrobank opened its Davao branch, the bank’s first provincial branch. At the onset of the 70s, Metrobank opened its first international branch in Taipei.

The Central Bank, on April 1977, authorized Metrobank to operate a Foreign Currency Deposit Unit (FCDU). In the same year, branches and offices totaled 100 and the bank inaugurated its new Head Office at Metrobank Plaza in Makati.

On August 21, 1981, the Central Bank authorized Metrobank to operate as a universal bank. Following the grant of the universal banking license, Metrobank entered the following ventures: the acquisition of majority ownership of Philippine Savings Bank (the second largest savings bank in the country at that time); the establishment of a joint travel agency venture with Thomas Cook Group in Thomas Cook Phils., Inc. in 1986; and the tying-up with Toyota Motor Corporation of Japan and Mitsui to put up Toyota Motor Philippines in 1988. Metrobank subsequently entered into joint ventures with several renowned corporations like Sumitomo Mitsui Banking Corporation of Japan to create Sumigin Metro Investment Corporation; the National Mutual Holdings Ltd. of Australia to create Philippine AXA Life Insurance Corporation; and the ORIX of Japan to create ORIX Metro Leasing and Finance Corporation.
The Old Metrobank Logo used until 2009

In September 1982, the number of Metrobank branches, offices and subsidiaries surpassed the 200 mark. A year later, Metrobank topped all the private domestic bank in total resources with P8.8 billion.

The bank continued to experience steady growth through the years and in September 1989, it increased its authorized capital stock from P2 billion to P5 billion. The bank’s total capital funds on June 30, 2006 stood at P57.3 billion. Its consolidated resources amounted to P588.1 billion as of the same period. As of June 2007 assets reached P669.1 billion ($14.5 billion) (P46=$1).

Metrobank’s subsidiaries are Toyota Motor Philippines Corporation, Philippine Savings Bank, First Metro Investment Corporation, Metrobank Card Corporation, ORIX Metro Leasing and Finance Corporation, SMBC Metro Investment Corporation, First Metro Travelex (formerly Thomas Cook (Phils.)), Philippine AXA Life Insurance Corporation, Mirant Global Corporation, Philippine Charter Insurance Corporation, MBTC Technology, Inc., Toyota Financial Services Corporation, Toyota Cubao, Inc., Toyota Manila Bay Corporation, First Metro Securities Corporation, First Metro International Investment Co. Ltd., Metropolitan Bank (Bahamas) Ltd., MB Remittance Center Inc. (USA), Metro Remittance Singapore, Metro Remittance UK Limited, Metro Remittance (Italia) SpA, Metro Remittance S.A. (Spain) and MBTC Exchange Services GmbH (Austria).

The Metrobank Group has a combined network of over 800 local and international branches/offices, remittance offices and subsidiaries worldwide. It has 557 domestic branches and 32 offices in New York, Hong Kong, Tokyo, Osaka, Seoul, Pusan, Guam, Taipei, Kaohsiung, Madrid, Barcelona, Vienna, Rome, Bologna, Milan, Singapore, Chicago, Hawaii, and Shanghai.

On September 28, 2009, Metrobank is the first local bank to offer a line of CNY denominated offerings.[2]
[edit] Lehman Brothers’ exposure

On September 17, 2008, Bangko Sentral ng Pilipinas Governor Amando M. Tetangco, Jr. announced Banco de Oro and Metrobank set aside provisions totalling $ 94.7 million to cover their exposure to the Lehman Brothers’ collapse.’ Metrobank set aside $ 14 million in provisional funds, and it has $ 20.4 million worth of bonds issued by Lehman Brothers and P 2.4 billion ($ 51.28 million) in loans to a Philippine-based subsidiary of the US investment bank.[3][4] The BSP data revealed Metrobank has a Lehman Brothers exposure of $ 71 million, and it set aside a buffer equivalent to 70% of its exposure

Domestic subsidiaries and affiliates

* First Metro Investment Corporation
* First Metro Securities Brokerage Corporation
* First Metro Travelex
* MBTC Technology
* Metrobank Card Corporation
* Orix Metro Leasing and Finance Corporation
* Philippine AXA Life Insurance Corporation
* Philippine Charter Insurance Corporation
* Philippine Savings Bank
* SMBC Metro Investment Corporation
* Toyota Cubao
* Toyota Financial Services Philippines Corporation
* Toyota Manila Bay Corporation
* Toyota Motor Philippines Corporation

[edit] International subsidiaries and affiliates

* First Metro International Investment Corporation Ltd HK
* MBTC Exchange Service GmbH – Vienna
* MB Remittance Center HK
* Metro Remittance Center SA – Spain
* Metro Remittance (Italia) SpA
* Metro Remittance Singapore Pte Ltd
* Metro Remittance (UK) Limited

Official Website: http://www.metrobank.com.ph/

Banco de Oro Universal Bank (PSE: BDO), commonly known as Banco de Oro and BDO, is a major bank in the Philippines. It is owned by the SM Group of Companies, one of the country’s largest conglomerates and owner of the SM chain of malls. Following the Banco de Oro-Equitable PCI Bank merger, the bank has since become Banco de Oro Unibank, Inc.

The new Banco de Oro (BDO) will retain the ticker symbol of the old Banco de Oro. 1.3 billion BDO shares will be issued in exchange for 727 million Equitable PCI Bank shares, which was de-listed on June 4, 2007.).

BDO is now the largest bank in the Philippines in terms of assets, loans and deposits. The bank is the product of the Banco de Oro-Equitable PCI Bank merger after the boards of both Banco de Oro Universal Bank and Equitable PCI Bank agreed to merge on December 27, 2006. For a while, the entity was known as Banco de Oro-EPCI, Inc., but announced that it would go by the name Banco de Oro Unibank, Inc. starting February 2007.

Banco de Oro had its humble beginnings on January 2, 1968, when it started off as a thrift bank called Acme Savings Bank. With two branches in Metro Manila, Acme was one of the smallest banks in the Philippines at the time.

In November of 1976, Acme was acquired by the Sy Group, the group of companies currently owned by retail magnate Henry Sy, and renamed Banco de Oro Savings and Mortgage Bank.
The old logo of Banco de Oro

In December of 1994, BDO became a commercial bank. To reflect the bank’s new status, BDO was renamed Banco de Oro Commercial Bank, and in September of 1996, BDO became a universal bank, which led to the bank’s name being changed to the current Banco de Oro Universal Bank. It is one of the many banks owned by a Chinese-Filipino in the Philippines (others include Metrobank and Chinabank).

BDO eventually became involved in insurance services in 1997 (it is a bancassurance firm) by establishing a subsidiary called BDO Insurance Brokers. In 1999, BDO expanded its insurance services through partnerships with Assicurazoni Generali s.p.a., one of the world’s largest insurance firms, and Jerneh Asia Berhad, a member of Malaysia’s Kuok Group. Later, BDO partnered up with its insurance affiliates, which are Generali Pilipinas Life Assurance Company and Generali Pilipinas Insurance Company, in March of 2000.

21st Century, Mergers and Acquisitions
On June 15, 2001, BDO merged with Dao Heng Bank’s Philippine subsidiary, with BDO as the surviving entity. The merger boosted the number of BDO’s branches from 108 branches before the merger to 120 after the merger. In late April 2005, United Overseas Bank sold 66 out of its Philippine subsidiary’s 67 branches to BDO after UOB’s Philippine subsidiary is set to rationalize its operations from retail to wholesale banking. All UOB branches completed integration into the BDO network on March 22, 2006, increasing the number of Banco de Oro branches to 220.

On August 5, 2005, Banco de Oro and an SM subsidiary, SM Investments, bought 24.76% of the shares of Equitable PCI Bank, the Philippines’ third-largest bank, and 10% of an Equitable PCI affiliate, Equitable CardNetwork, one of the Philippines’ largest credit card issuers, from the family that founded the bank, the Go family. BDO has also been offered a further 10% by another Equitable PCI affiliate, EBC Investments, and a deal is being made to buy (awaiting court approval) the 29% stake of the Social Security System (SSS), the Philippines’ pension fund. Subsequent acquisitions enabled the bank to acquire a 34% stake in Equitable PCI.

On December 1, 2005, Banco de Oro shares were listed as a component of the PSE Composite Index for the first time.

On January 6, 2006, Banco de Oro, with the SM Group of Companies, submitted to Equitable PCI a merger offer with Banco de Oro as the surviving entity. Under the proposal, Banco de Oro will swap 1.6 of its shares for every 1 Equitable PCI share. As a second option, Banco de Oro also offered to base the swap ratio on the book values of both banks to be assessed by an independent accounting firm using International Accounting Standards (IAS). To effect the merger, Banco de Oro needs consent of Equitable PCI shareholders representing 67% of Equitable PCI. These include the Social Security System (SSS) with 29%, the Government Service Insurance System (GSIS) with 14%, and the family of Equitable PCI chairman Ferdinand Martin Romualdez with eight percent. Banco de Oro said that the proposed “merger of equals” would create the country’s second biggest bank with assets of about P608 billion (as of June 2007), just next to Metrobank with P669.1 billion (as of June 2007), the current banking industry leader in the Philippines. Bank of the Philippine Islands is the current third biggest bank in the Philippines with P592.6 billion (as of June 2007). Banco de Oro has asked Equitable PCI to study their offer until January 31, 2006.

Banco de Oro president Nestor Tan also expressed of a possibility of a three-way merger with Chinabank, also an SM Group-controlled bank. The bank president also said that the proposed Banco de Oro-Equitable PCI merger would consolidate the strengths of Banco de Oro and Equitable PCI in consumer lending and result in a dominant player in middle-market lending and a market leader in money remittance volumes, branch banking, trust and corporate banking with the combined network of 685 branches located in the Philippines and abroad.

Although Romualdez and the GSIS have shown stiff opposition to the BDO-Equitable PCI merger, the SSS is still studying the possibility of a merger. In fact, UBS studied the deal and claims that the merger through the stock swap option is a “win-win” situation. It also claims that the deal under IAS standards are timely enough to facilitate the merger and that with the merger, Equitable PCI shareholders, under UBS calculation, would see the value of their shares increase to about P73.60 per share, more than the fair value target price of 67 pesos.

With Equitable PCI and BDO’s merging fully realized. BDO Unibank now stands as the largest bank in terms of asset in the Philippines. With offices in both the Ortigas Center area in Pasig/Mandaluyong and in Makati, the Philippines’ central business district, with its newly renovated BDO Corporate Center.

Official Website : http://www.bdo.com.ph/