BDO acquisition of EIB on track, says bank official

MANILA, Philippines - The acquisition by Banco de Oro Unibank Inc. (BDO) of Export and Industry Bank (EIB) remains on track with “just a few conditions still to be met” as required by the Bangko Sentral ng Pilipinas (BSP).

“The two banks are now working together on the completion of the requisite conditions imposed by BSP,” EIB president Juan Victor Tanjuatco said in a press statement.

He said one of the conditions is for BDO to provide liquidity to EIB “until its full integration into its network.”

EIB said the transaction is not a merger but an acquisition since BDO will assume all liabilities reaching a combined P52 billion.

In exchange, BDO will immediately take over the acquired bank’s 50 branches, including 35 located within Metro Manila.

“BDO will exercise financial oversight, specifically over EIB’s treasury, credit and branch operations,” the EIB executive said.

EIB is yet to secure stockholders’ approval of the sale in a meeting tentatively scheduled in a month’s time.

Another condition is that BDO will also absorb all 550 employees of the acquired bank. Officials of the commercial bank of the SM Group of Companies said they still have more than 700 vacant posts.

BDO has over 700 branches nationwide, with another 30 still to be opened in the next two to three years. It likewise operates 1,200 automated teller machines.

With the eventual acquisition, BDO will cement its position as the biggest bank in the country.

Recently, it reported a net income of P4.1 billion in the first semester of 2010, nearly doubled its earnings in the same period in 2009.

Last year, it reported a net income of P6.1 billion for a 173-percent expansion in earnings over 2008.

Earlier, BDO president and chief executive officer Nestor Tan said the bank would be going to the capital markets to raise fresh funds.

“Our capital raising is intended to support our growth,” Tan said, adding that the amount and form have yet to be finalized.