‘Privatization good for UCPB’

MANILA, Philippines - The privatization of United Coconut Planters Bank (UCPB) will have a positive impact on the bank’s creditworthiness, Moody’s Analytics Inc. said in its latest report.

Moody’s Analytics is a leading independent provider of data, analysis, modeling and forecasts on national and regional economies, financial markets, and credit risks.

Moody’s noted the strong interest indicated by local and foreign banks on UCPB recapitalization scheme.

Last week, Philippine National Bank (PNB) said it is conducting due diligence for its possible acquisition of the government’s 72-percent equity in UCPB.

UCPB currently has a stable rating from Moody’s (B2 stable, E/caa1 stable).

“PNB’s announcement is credit positive for UCPB because it confirms there is strong market interest in the government’s stake and it will likely prompt other potential acquirers to enter the bidding process,” Moody’s said.

Moody’s said “a smooth completion of UCPB’s privatization will also help it raise new equity capital to meet Basel III capital requirements.”

“And, if UCPB is successfully privatized and acquired by a larger bank, we expect its credit profile would benefit from the support of its new majority shareholder,” Moody’s added.

UCPB earlier said it has yet to finalize the terms of reference (TOR) of the privatization plan.

Aside from PNB, other banks that have signified keen interest and have reportedly held initial talks with UCPB are BDO Unibank Inc., Eastwest Banking Corp., Union Bank of the Philippines and China Banking Corp.

UCPB is currently owned by the government and coconut farmers. About P14 billion of the coconut levy fund is placed in an escrow at UCPB.