Gokongwei re-enters commercial banking

MANILA, Philippines - The Gokongwei Group has re-entered big-league banking in the country as it completed yesterday the acquisition of the local unit of Royal Bank of Scotland (RBS).

In a statement, the conglomerate’s banking arm Robinsons Savings Bank said it has closed the deal to buy out RBS (Philippines) Inc. from the Royal Bank of Scotland Group Plc and the Royal Bank of Scotland N.V.

The two parties entered into a share-swap agreement last Feb. 24. The amount involved was not disclosed.

“The acquisition will allow JG Summit to get back into commercial banking, enhance the conglomerate’s financial synergy, and compete in a way the Gokongwei Group is known for,” said RobinsonsBank chairman Lance Gokongwei.

He said JG Summit, through RobinsonsBank, is positioning itself for further business growth and “we would like to be there to provide funding to business once the economic climate picks up.”

RobinsonsBank has 53 branches nationwide. With the merger, the new commercial bank will be the 14th largest among commercial banks and 31st among all commercial banks and universal banks combined.

“Thanks to the extremely professional and responsive Robinsons team, this transaction was flwalessly executed. I am certain that the enlarged RobinsonsBank will be a formidable player in the local banking industry,” RBS Philippines president and country exectuive Billy Gocuingco said.

RobinsonsBank president and CEO Reynold Y. Gerongay earlier said they plan to merge the savings bank into the new commercial bank. RBS Philippines holds a commercial banking license while RobinsonsBank has a thrift bank license.

“We believe we can create more value for the group this way, as we can now maximize not only the opportunities within the group’s financial ecosystem, but also aggressively tap markets outside the group, given the additional products and services which commercial banks are allowed to offer.”

The sale of the local RBS unit came after its parent suffered extensively for the financial meltdown last year, forcing it to dispose some of its assets.

The Gokongwei Group, along with the Lopez Group, sold off their combined 72 percent stake in PCI Bank, then the country’s third biggest lender, in 1999, to the much smaller Equitable Bank, which was backed up by state pension funds GSIS and SSS. The bank has since been taken over by the Sy family and is now known as Banco de Oro Universal Bank (BDO).