BDO acquires GE Money Bank

MANILA, Philippines - Banco De Oro Unibank Inc. (BDO) has acquired GE Money Bank, the thrift banking arm of GE Capital, the financial services unit of global industrial giant General Electric Co. through a share swap deal.

Under the acquisition arrangement between GE Capital and BDO, an initial 1.5-percent stake in BDO will be opened up for GE.

“As part of the agreement, GE will also make a strategic investment in BDO by acquiring a stake of approximately 1.5 percent, with an option to further increase its holdings up to 10 percent. Both transactions are subject to closing conditions, including regulatory approvals, and are expected to be completed within the third quarter of 2009,” BDO said in a report.

BDO president Nestor V. Tan said that the deal would open more opportunities for the bank, given the vast international business network of GE.

The thrift bank manages 30,000 customers, 350 employees and a network of 31 branch licenses and 38 ATMs nationwide.

BDO acquired Equitable Savings Bank and BDO Elite Savings Bank, both classified as thrift banks, and PCI Capital Corp., an investment house.

“They will be folded into BDO eventually,” Tan told the STAR.

BDO integrated all commercial and thrift banking activities into the bank, enabling it to accelerate the growth of its consumer banking business. Since 2007, commercial banks had gone after the consumer or retail market as the corporate sector had turned to the capital markets for funds.

GE Money’s consumer and SME loan portfolio is estimated to amount to between P4 billion to P6.6 billion as of end-2008.

“We welcome the opportunity to be partners with an institution like General Electric. With GE’s expertise in the financial sector, we hope this partnership will ultimately provide customers with better consumer products and flexible financing solutions.” Teresita T. Sy-Coson, BDO chairperson, said.

BDO reported assets of P801 billion in the first quarter of 2009. It has a network of over 700 branch licenses and 1,200 ATMs, and an offshore branch located in Hong Kong and an overseas network of 21 remittance offices.

According to Mark Arnold, CEO of GE Capital Global Banking in Southeast Asia, “BDO’s superior market presence and clear strategy for growth will provide the business with the best opportunities for success. In addition, key customers and depositors will benefit from the best that both banks have to offer, with greater convenience and a wider range of products and services than ever before.”