Philippine Business Bank on acquisition mode

MANILA, Philippines - Philippine Business Bank continues to be on the look out for potential acquisition to boost efforts of becoming a bigger bank and eventually a universal bank over the next few years.

PBB president and chief executive officer Rolando Avante said the thrift bank is always scouting for potential acquisition after spending about P600 million for the acquisition of three smaller banks in a little over a year.

“We are very opportunistic. You spend time to talk to potential partners and before you know it you have a deal,” Avante said.

Last July, the thrift bank owned by Ambassador and Zest-O founder Alfredo Yao allocated P63.9 million to acquire Bataan Savings and Loan Inc.

It also spent P518.2 million to acquire 100 percent of Insular Savers Bank Inc. of the Martirez family after taking over Cavite-based Rural Bank of Kawit Inc. for a total consideration of P15 million in June last year.

Avante said the bank would consolidate the expansion of its branches by the first quarter of next year including the branches of Bataan Savings, Insular Savers and Rural Bank of Kawit.

Avante said the bank is looking at growing its network to about 200 to 250 branches nationwide from the current number of 133.

“Yearly you have investments and the problem with those investments do not return all the money. We are expanding and expansion is hurting our profitability. The challenge for us is to be able to convert that investment into something that will contribute in the next three to five years,” he said.

The bank president said PBB expects to end the year with flat or slightly higher earnings.

“For the bank it is not a great year. I think hopefully we will be going to show good numbers. If not better, hopefully in levels the same as last year,” Avante said. The bank earned P536.2 million in 2014.

Earnings of PBB slipped two percent to P471.77 million in the first nine months due to lack of trading gains as well as higher provisioning for soured loans.

“Performance wise, yes we are lagging behind we are a laggard because before the bank was doing sensational in treasury income but now we are building our foundation for a strong regular banking business,” he added.

Avante said 2016 would be another difficult year for the banking sector with the expected interest rate lift off in the US, the continued economic slowdown in China, and the May presidential and national elections in the country.

“In a way business for next year will be more difficult because US interest rates are expected to go up. Apart from that we all know there will be elections next year and it could either bring stability or also cause instability,” he said.