SM Group acquires control of Plantersbank

MANILA, Philippines - China Banking Corp., a banking unit of the SM Group, is acquiring a controlling stake in the Tambunting-owned Planters Development Bank, the country’s largest thrift bank.

In a disclosure to the Philippine Stock Exchange yesterday, Chinabank said its board has approved the  bank’s acquisition of more than two-thirds of the outstanding subscribed capital stock of Plantersbank.

Chinabank said the deal would combine the resources of the country’s leading bank for SMEs (small and medium enterprises) with a 93-year old universal bank with the longest history of supporting entrepreneurs in the country and a solid track record of financial strength and stability.

“Over the course of Plantersbank’s evolution and growth as a financing institution, we have sought to forge ties with partners driven by the same commitment to the SMEs. This partnership with Chinabank underscores our shared commitment, and will ensure the continued development of broad-based access to financial products and solutions for the SME,” Plantersbank chairman Jesus Tambunting said.

Plantersbank is currently the Philippines’ largest privately owned and managed development bank and the acclaimed leading bank for SMEs.

The thrift bank has total assets of over P50 billion and ranks 22nd out of 37 commercial and universal banks and over 800 thrift and rural banks.

It is also ranked within the top 500 corporations in the Philippines.

Early this year, the World Bank’s International Finance Corp. (IFC) has approved a P1.02-billion investment in a special purpose vehicle to purchase Plantersbank’s non-performing loans.

Chinabank, on the other hand, is currently the eighth largest bank in the country with P346 billion in assets. With Plantersbank’s P52.7-billion assets,  the acquisition may bring Chinabank’s standing in the banking industry a notch higher.

From 148 branches in 2006 at the start of its expansion program, it now has a total network of 333 branches, complemented by 544 ATMs nationwide.  The group will now have a combined network of at least 411 branches.

As of end-June 2013, Chinabank had posted a 46 percent growth in consolidated profits to P2.96 billion from P2.03 billion for the same period last year, for a return on average equity of 13.24 percent  and a return on assets of 1.81 percent.

The Plantersbank deal bolsters China Bank’s current strategy in two areas – growing its middle market/SME portfolio and its network expansion program.

The China Bank Group includes Chinabank, China Bank Savings (CBS), Unity Bank, CBC Insurance Brokers Inc., and Bancassurance affiliate Manulife China Bank Life Assurance Corporation (MCBLife).