Singapore bank ups stake in BPI to 27%

The Development Bank of Singapore (DBS) has further increased its shareholding in Bank of the Philippine Island (BPI) through the purchase of Far East Bank and Trust Co. (FEBTC) shares.

Since BPI and FEBTC have merged and FEBTC shares have been delisted, the FEBTC shares will be converted to BPI shares.

DBS bought 105.7 million of FEBTC common shares representing approximately 17.8 percent of the issued capital of FEBTC equivalent to approximately 73.9 million common shares of BPI or approximately six percent of the merged BPI-FEBTC.

With the additional six percent, the stake of DBS in BPI has risen to 27.2 percent.

The selling price was P82.50 per one FEBTC share, which is roughly equivalent to P118 per one BPI share. The total sale price is P8.725 billion.

DBS already has a direct share in BPI amounting to 20.7 percent. It had acquired its 20.7 percent stake in BPI by buying the shares of the American International Group and US-based JP Morgan Overseas Capital Corp. and Morgan Guaranty International Finance Corp.

DBS subsequently acquired another 1.06 percent in the merged BPI-FEBTC by buying FEBTC shares in an earlier transaction.

The Singaporean bank has said that it wants a stronger presence in the country and has decided that the best way to do so is to tie up with one of the country's largest banks.

DBS had initially entered the country by successfully getting one of the 10 foreign bank branch license issued by the BSP as part of the liberlization program.

However, as a sign of its commitment to stay, DBS eventually decided to acquire a local bank, the Bank of Southeast Asia, and incorporate locally as DBS Philippines.

Even with DBS Philippines, DBS decided to acquire a stake in BPI and is reportedly planning to eventually sell DBS Philippines and concentrate on being a partner in BPI.

BPI, however, remains majority controlled by the Ayala Group. --