Merger of PNB, Allied Bank to be delayed

The merger of the Philippine National Bank (PNB) and Allied Banking Corp. (Allied Bank) will be delayed by six months due to certain legal requirements.

The two banks were originally scheduled to be completely integrated by year’s end, with the PNB as the surviving entity.

“There is a need to comply with a US banking regulation requiring Allied Bank to divest its 28-percent equity share in California-based Oceanic Bank prior to the merger,” PNB said in a statement.

Nonetheless, the process of integration continues, it added.

“Significant progress has been made on the identification and synchronization of information technology systems; alignment of products, policies and procedures; branch rationalization; and review for consolidation of required regulatory documentation,” Omar Byron T. Mier, PNB president and chief executive officer, said.

Thus far, the automated teller machine (ATM) systems of PNB and Allied Bank have been integrated to allow each other’s clients to use either other’sATM network free of charge despite the fact that the two are on separate ATM networks.

Mier said that in support of the merger, organizational changes in the board and management of both banks will be implemented beginning January next year.

Among the changes are: PNB director Domingo T. Chua has resigned from the board and has been elected as board chairman of Allied Bank; lawyer Estelito P. Mendoza has been elected director of PNB, filling the vacancy left by Chua; Gloria Tan-Climaco has been elected director of PNB taking the place of director Macario U. Te who will retire effective end 2008; and PNB executive vice president for global operations Anthony Q. Chua will be seconded to Allied Bank as chief operations officer.

Mier expressed confidence that the merger will be completed expeditiously once the approval of the US banking regulators is obtained.

Post-merger PNB will become the fourth largest domestic bank in terms of assets and branch network, with the most extensive international footprint among local banks.

It will have one of the largest remittance businesses in the country’s banking industry. Last year, PNB handled for $1.8 billion while Allied Bank took care of $300 million in remittances.

The merged entity will have a combined branch network of 626 branches from the 324 of PNB and the 302 of Allied Bank. There will be a number of rationalization of branches as roughly 15 are located right beside each other. The combined automated teller machine (ATM) network will reach 614 units.