BDO to open 50 new branches this yr

MANILA, Philippines - BDO Unibank Inc. said it is still keen on opening between 35 to 50 additional branches this year.

In a press briefing yesterday at the Philippine Stock Exchange (PSE), BDO president and chief executive officer Nestor V. Tan said the expansion would enable the bank to more effectively reach its target market.

The commercial bank of the SM Group acquired the Rural Bank of San Juan Inc. last May. Formerly known as Banco San Juan, the rural bank operates 30 branches located mostly in Metro Manila and selected areas in Luzon. It has P2 billion in total resources.

Tan said the number of their branches would dramatically increase if BDO manages to finally acquire the closed Export and Industry Bank (EIB).

EIB was placed under receivership in April after it voluntarily declared its inability to meet maturing obligations. The state-run Philippine Deposit Insurance Corp. (PDIC) has since started paying out depositors and at the same time, opened the door for interested bidders for the sale of the assets and liabilities of EIB, including its 50 branches.

Meanwhile, Tan said the P43.5 billion ($1 billion) the bank raised recently through a pre-emptive rights offer would retire maturing Tier 2 debt papers.

“By September, we would be retiring P10-billion worth of Tier 2 debts,” Tan told reporters.

The rest would be used for branch expansion and to serve as buffer for any changes in capital base requirements, based on the international Basel III capital framework.

The present 10-percent minimum capital adequacy ratio (CAR) is estimated to increase to 12.5 percent.

Tan said that with the rights offer, its total CAR rose to 20 percent from 15 percent, and from the previous 10 percent Tier 1 to 15 percent.

The rest of the additional capital would add to their loan portfolio, which has been growing by an annual average of 20 percent. In the first quarter of 2012, loans grew 23 percent while for the whole of 2011, lending grew 24 percent.