IN BID TO ACQUIRE URBAN BANK: Bancommerce wins support of majorityshareholders

Bank of Commerce moved one step closer to acquiring Urban Bank after winning the support of its majority stockholders, Bank of Commerce President Raul de Mesa said yesterday.

He said major shareholders like the groups of Arsenio Bartolome and Teodoro Borlongan, which own at least 30 percent of Urban Bank, have already signed a memorandum of agreement (MOA) last week. The MOA allows the existing shareholders to join forces with Bank of Commerce in its bid to buy the bank.

"It's true we did sign an agreement for the proposed rehabilitation of the bank. But that is all I can tell you because we have a confidentiality clause," he said.

After signing out the shareholders, he said they are now convincing the big depositors of Urban Bank to convert their deposits into equity. Among its biggest depositors are Petron Corp. with P1 billion, San Miguel Corp. with P1 billion, and Manila Electric Co. with P500 million.

Bank of Commerce, he said is interested in Urban Bank's 28 branches. He said most of the branches of Urban Bank were located in areas where Bank of Commerce did not have a presence. It would also enable Bank of Commerce to diversify its client base into the big Filipino-Chinese businessmen where Urban Bank has a strong presence.

De Mesa said his bank is focused on the top 500 corporations and is now looking at the middle market which is trade financing.

"We are looking at expanding our balance sheet and our branch network. We are fairly limited in our branches right now," he said. Bank of Commerce has 42 branches at present. It could not open more branches because of the moratorium imposed by the Bangko Sentral ng Pilipinas (BSP) disallowing banks to open additional branches.

The bank is also in the process of integrating its operation with Traders Royal Bank, a medium-sized bank with strength in the Visayas and Mindanao areas. The merger between the two banks, he said has been approved in principle by the monetary authorities early this month.

Plans are also underway to increase the capital of Bank of Commerce to P5 billion from P3.5 billion to finance its expansion plans. He said the additional capital will be put in placed in the next one to two years.

At present, the bank has total assets of P15 billion, deposits of P10 billion, and total liabilities of P12 billion.