PNB income up; merger with Allied Bank okayed

MANILA, Philippines - Philippine National Bank (PNB) said its net income likely grew 20 percent to about P4.2 billion last year, from P3.54 billion in 2010.

PNB chairperson Florencia G. Tarriela noted in a press briefing yesterday that their bottom line went up at least 20 percent, although she declined to state a definite figure.

She added that the bank is expected to do even better this year with the full integration of Allied Banking Corp. which the PNB shareholders approved yesterday.

The integration of the two commercial banks, both identified with taipan Lucio Tan, will result in savings reaching P1 billion annually.

“Our cost-to-income ratio will be 50 percent upon attainment of the full integration, from the 61 percent prior to the integration,” said Anthony Q. Chua, president of Allied Bank and the head of the integration team of the new PNB.

The surviving entity is PNB, which will result in a new bank that could be ranked as fourth largest in terms of assets, receivables, and domestic branch network.

The combined distribution network reaches 650 branches nationwide and total assets of P514 billion.

It will likewise have the largest international footprint across the Asia Pacific region, Europe, the Middle East and North America.

“It will take the bank 18 months to be integrated functionally, which is different from the legal merger that may take only two to three months,” Chua said.

Full functional, Chua explained, means the integration of the accounting systems and the entire core banking systems. That means adapting one core banking system for the merged bank while slowly dismantling the existing system.

In terms of personnel, the new PNB will have an entire complement of 7,000-8,000, from the existing 3,800 of Allied Bank and 5,000 of PNB.

Meanwhile, the merger was afffected through a share-for-share exchange. Allied Bank shareholders will get 130 PNB shares for every Allied Bank common share and 22.763 PNB shares for every Allied Bank preferred share held.

PNB shares will be issued at P70 per share.

The new board will be introduced in the first stockholders’ meeting in May 2012, which will likely introduce the president of the new bank.