The country’s credit card base currently stands at almost five million but it has the potential to expand by another five to six million, Philam said.
The surviving entity will be AIG Philam Savings Bank with combined resources of over P10 billion and authorized capital of P800 million.
"That will however mean a modest net income target for 2006 of P170 million," AIG Consumer Finance Group Inc. head Joven D. Reyes said, adding that a faster pace of growth is expected in the following years.
AIG Consumer Finance and Philippine American Life and General Insurance Co. (Philamlife) jointly control the thrift and savings bank, while the credit card business is fully owned by AIG Consumer Finance.
The acquisition will catapult the thrift bank a couple of notches higher from its ranking of ninth in terms of resources within the thrift banking system. The banking subsector is bannered by BPI Family Savings Bank and Philippine Savings Bank, subsidiaries of the Bank of the Philippine Islands (BPI) and Metropolitan Bank and Trust Co. (Metrobank), respectively.
The card business already accounts for two-thirds of the bank’s consumer banking business, with the remaining one-third from auto loans.
Reyes added that they will be introducing new lending products, including mortgage and personal loans, in a bid to improve competitiveness. The card business, however, will remain the biggest bottom line earner with the rest of the lending efforts accounting for the remaining half of the loan portfolio.
Bank officials likewise admitted that they are in the market for acquisitions. "We want to grow organically, or through acquisitions, to be competitive and barge into the top five in the thrift banking system."
The savings bank presently have eight branches, with an additional branch to open in October. Five of the existing branches are located in Metro Manila.
"We are looking to acquire branch licences from the Philippine Deposit Insurance Corp. (PDIC), or buy banks with the right synergy mix," the bank officials said.