PDIC okay for PNB-Allied merger seen

Manila, Philippines - The Philippine Deposit Insurance Corp. (PDIC) may finally give its endorsement to the merger of two banks owned by tycoon Lucio Tan by September, an official said late Wednesday.

“I spoke with the PDIC and they said it’s near. It is likely (for us) to get it this quarter,” Philippine National Bank (PNB) chairman Florencia Tarriela said on the sidelines of the Financial Executives of the Philippines forum on small and medium enterprises at the Peninsula Manila Hotel in Makati.

“I am optimistic we will get it this quarter. In fact, since 2008, nothing has changed so I do not see any reason why they will not grant us endorsement,” she explained.

PDIC president Valentin Araneta was not answering phone calls and texts from The STAR while other PDIC officials could not be reached for comment.

Shareholders of PNB and another Tan-led bank, Allied Bank Corp., approved the merger as early as 2008 and had started merging operations last year, ahead of getting regulatory approvals from the PDIC, the Securities and Exchange Commission (SEC) and the Bangko Sentral ng Pilipinas (BSP).

The proposed merger between PNB and Allied Bank would create the country’s fourth largest bank.

PDIC’s endorsement is needed before the BSP and SEC process the merger application.

“We are optimistic of getting it. There are no more hindrances that I know of,” Tarriela said.

The Sandiganbayan last May ruled against the Presidential Commission on Good Government (PCGG), which has long opposed the PNB-Allied Bank merger on grounds that Allied Bank shares were part of the ill-gotten wealth of former dictator Ferdinand Marcos.

The anti-graft court said PCGG failed to prove that the disputed Allied Bank shares were acquired through illegal means.

Tarriela said the merger will combine PNB’s remittance network with Allied Bank’s “middle market” penetration.

“Of course this will benefit our customers as it will create synergies in both aspects,” she added.

PNB, the country’s seventh largest in terms of assets, posted a net income of P1.2 billion from January to March this year, 11 times more than the previous year due to huge earnings from securities and foreign exchange trading.

The Allied Bank Group, meanwhile, recorded a profit amounting to P529.102 million in the first quarter, more than double year-ago levels also due to hefty trading gains.