UOB completes buyout, readies capital hike

United Overseas Bank Ltd. (UOBL), Singapore’s largest private bank, formally acquired the remaining Filipino shareholdings in United Overseas Bank Philippines (UOBP) last Friday night and is now readying the infusion of more funds into UOBP to reposition its local operations and support its growth and capitalize on market opportunities.

"The agreement was beneficial to all the parties and certainly to UOBP which can now concentrate on building up its business as a commercial bank," the Singaporean and Filipino partners said in a joint statement.

Both parties said they were satisfied with the terms of the agreement. No details were given.

UOBL said its resulting 100-percent ownership of the local bank gives it a free hand in running UOBP and "certainly encourages us to put in more money into it because we want our local operations to be a strong integral part of our regional expansion strategy."

It added that the bank will "aggressively address" the weaknesses in its loan portfolio and operations to further strengthen the bank.

Under the agreement, part of the settlement proceeds would also be used to repay loans due from borrowers related to the previous shareholders. The Filipino partners would also help UOBP in the collection effort of P1.4 billion in past due loans. These loans were acquired from Westmont Bank, UOBP’s predecessor.

"We want UOBP to be one of the most stable banks in the local banking system, with enough capitalization and a healthy loan portfolio. We will also be more aggressive in our marketing position henceforth," UOBP said.

After the acquisition, UOBP will now be a wholly-owned foreign bank with one of the largest branch networks operating locally. The 100-percent ownership is now allowed under the General Banking Act of 2000.

UOBL, the mother company in Singapore, has global assets of $64 billion (P3.2 trillion), roughly equivalent to assets of the entire Philippine banking system.

It has a presence in 27 countries and is now in the process of strengthening its regional business.

"The Philippine operations are an integral part of our strategy to be a major player in the region which holds so much potential in growth outside of Singapore," UOBL said.