BDO absorbs thrift banks, invest house subsidiaries

Banco de Oro Unibank Inc. (BDO) will absorb three of its subsidiaries following approval from the Bangko Sentral ng Pilipinas (BSP).

The merger plan will now be submitted to the Securities and Exchange Commission (SEC) to be fully implemented.

Equitable Savings Bank and BDO Elite Savings Bank, both classified as thrift banks, and PCI Capital Corp., an investment house, will then be fully integrated into BDO.

“We will give up our thrift bank licenses, and integrate all the branches and services of the two thrift banks,” Nestor V. Tan, BDO president and chief executive officer, said.

When fully integrated, it will result in a 703-branch network for BDO, making it the country’s largest bank in terms of the number of branches.

In the case of PCI Capital Corp., it has become a redundancy due to the presence of BDO Capital Corp.

“By cutting subsidies, we will gain from savings and the simplification of operations,” Tan added.

 The merger is part of BDO’s corporate rationalization plan that seeks to streamline operations and simplify the group’s organizational structure. Cost savings will be realized by consolidating administrative functions, eliminating redundancies and eventually implementing unified branding and advertising.

Tan added the exercise should lead to operational efficiencies and economy as well as an optimized capital structure for the group. Also, the productivity of the thrift bank outlets will also be enhanced by the ability to offer a wider array of products and services as branches of a universal bank.

Though it will require additional costs, Tan said the merger can still be drawn from its integration budget. “We do not need additional capital expenditures, it is already budgeted.”

The continued integration of the acquired assets started in 2006 when BDO acquired Equitable PCI Bank and the banking operations of Amex.— Ted Torres

Last month, BDO merged two of its wholly-owned information technology subsidiaries, Equitable Data Center Inc. and PCI Automation Center Inc., with Equitable Data Center as the surviving entity. The remaining IT center was renamed BDO Technology Center Inc., which will provide the IT requirements of the BDO Group. The merger of these information technology subsidiaries is in line with BDO’s policy of a streamlined organization and effective operations. — Ted Torres