MB okays Banco de Oro acquisition of UOB branches

The Monetary Board, the policy-making body of the Bangko Sentral ng Pilipinas, has approved Banco de Oro’s acquisition of the 66 branches of Singapore’s United Overseas Bank Ltd (UOB).

BDO, the banking unit of the SM Group of retail tycoon Henry Sy, signed in May an agreement to acquire UOB’s branch network in the Philippines and certain deposit liabilities for P600 million.

BDO said the proposed transaction is in line with its long-term expansion plans and UOB’s ongoing efforts to rationalize its business operations so as to achieve cost-efficiencies and build a business platform that is consistent with the business prospects in the country.

UOB intends to apply for conversion to a thrift bank to better reflect its increasing focus on wholesale banking and fee-based income.

In exchange for BDO’s assumption of the branch network and deposit liabilities, UOB will transfer certain of its assets to cover for the servicing of deposits.

BDO has been on an acquisition trail since its merger with Dao Heng Bank in 2001. It recently acquired 24.7-percent interest in Equitable PCI Bank, the country’s third largest lender.

In 2002, BDO acquired First e-Bank, then owned by Metro Pacific Corp. Sixty branches were added, bringing BDO’s total current network to 179 branches. Before that, most of BDO’s branches were concentrated in Metro Manila.

A year after, BDO purchased Banco Santander Philippines Inc. and its brokerage arm, Santander Investments Securities. The latter allowed them to reach the more affluent and high-networth clients who require banking services and investment products more sophisticated than the mainstream branch products and services.