Buenaventura urges three 'sleeping giants' to wake up

Bangko Sentral ng Pilipinas (BSP) Gov. Rafael B. Buenaventura is urging what he refers to as the three "sleeping giants" of banking to wake up and make their move to compete with the three mega-merged banks.

Buenaventura identified the three sleeping giants of banking as the United Coconut Planters Bank, Rizal Commercial Banking Corp. and Allied Bank.

Buenaventura said these three sleeping giants should wake up soon if they want to be able to compete with the three mega banks -- the Bank of the Philippine Island, Metropolitan Bank and Trust Co. and Equitable-PCIBank.

However, Buenaventura noted that the three banks are currently saddled with some internal problems.

UCPB, for instance, Buenaventura noted, continues to be hampered by the ownership question of its sequestered shares.

Ownership of the UCPB shares is being contested by the government and tycoon Eduardo "Danding" Cojuangco even as farmer/members of the Coconut Levy Fund have laid their own claims to the said shares.

Allied Bank, which is owned by taipan Lucon Tan, is unable to make any concrete moves because Tan is currently "distracted," Buenaventura said, by his problem in the Philippine National Bank and in Philippine Airlines.

Tan, who has a 46 percent stake in PNB, reportedly wants to be able to merge PNB with Allied. However, he has agreed to sell his 46 percent stake in PNB in a joint sale with government. If the bidding fails, Tan may be able to maneuver such a merger.

RCBC, the Yuchengco family-owned bank, is apparently just biding its time. It recently moved to acquire the credit card company Bankard which would complement if financial services.

According to Buenaventura, the three giants will eventually have to make moves to merge or acquire smaller banks if they still want to compete in the universal bank market.

Based on the new playing rules, bigger, with more capital is the name of the game.