Mizuho eyes Bank of Commerce

MANILA, Philippines - Mizuho Financial Group Inc., one of Japan’s three biggest banks,  has joined the list of bidders eyeing a controlling stake in San Miguel Corp.’s Bank of Commerce which is estimated to be worth more than $500 million.

San Miguel confirmed that  Mizuho made an offer to acquire 60 percent of the Philippine mid-sized lender.

Beer and food giant San Miguel, however, is not limiting sale discussions to just one single party as it seeks to capitalize on the growing interest by foreign groups to enter the Philippines following the liberalization of the banking industry.

The Aquino administration last year signed into law a bill that allows foreign banks to own 100 percent of Philippine banks, a move that is seen to benefit the country given the restrictions in other Southeast Asian countries.

The Philippine banking industry has become much more promising given the local economy’s relatively steady growth performance and an expected surge in loan demand from businesses.  Gross domestic product is forecast to rise by as much as eight percent this year.

Taiwan’s Cathay Financial Holding Co. is open to acquiring more shares in Rizal Banking Corp. after taking a 20 percent stake in the Philippines’ ninth largest lender by assets.

A successful acquisition of Bank of Commerce would help expand Mizuho’s presence in Southeast Asia and compete head on with other Japanese banks looking to further grow their operations.

It would be recalled in 2013 Malaysia’s CIMB Group HOldings Bhd. walked away from a deal that would have allowed it to take over the operations of Bank of Commerce, which was valued at only $278 million then.   It failed to reach an agreement with San Miguel due to unresolved issues on real estate ownership.

San Miguel acquired Bank of Commerce in 2008 as part of its massive diversification into power, oil refinery, tollroad, and mining.

Organized in December 1963, Bank of Commerce is   the 15th largest bank in the Philippines with total assets of P96.3 billion.  It operates  123 branches and 300 automated teller machines across the country.

 The conglomerate has long been looking for a buyer for its stake in Bank of Commerce, which has not only attracted interest overseas but locally as well.

The proceeds from the sale would augment San MIguel’s  readily available funds for acquisitions.

San Miguel aims to beef up its investments in energy and food as part of its P360 billion capital spending program through 2017.

 It has successfully acquired and divested assets at a gain. In 2007, the conglomerate sold Australian dairy firm National Foods Ltd. to Japan’s brewing giant Kirin Holdings  for $2.6 billion while in 2013, it unloaded its 27 percent shareholdings in power utility giant Manila Electric Co. for P72 billion.