BPI bullish on economy, bank expansion

MANILA, Philippines - The Bank of the Philippine Islands (BPI) is confident that the Philippine economy will grow this year, and that goes for the commercial bank of the Ayala Group of Companies.

And the officials of the third largest banking institution in the Philippines is not shy in saying that it does not mind buying other institutions to expand its influence.

BPI chairman Jaime Augusto Zobel de Ayala said that the Philippines is moving in an economic growth trajectory. And that BPI will not only support the country’s growth efforts, it plans to move in the same direction, organically or otherwise.

Zobel de Ayala said that BPI is open to acquire other institutions for its expansion program, while expressing confidence in the bank’s ability to grow quantitatively and qualitatively.

“While we are confident that the Bank can grow organically, we always remain open to value enhancing propositions or the right opportunities, which may come our way,” the BPI chairman said, during the stock rights offer listing at the Philippine Stock Exchange (PSE) last week.

“Our track record has proven that BPI has effectively and successfully transformed itself from 15 years ago.”

He however assured that BPI remains prudent despite its aggressive posture not only to protect but also to enhance shareholder value

BPI does not only support the country’s national economic development agenda but has also expressed availability in joining the public-private partnership initiative (PPP) of the Aquino administration.

“We will continue to reach out to a wider group of customers and assist them through their life cycle and their journey to financial stability and wealth management,” Zobel de Ayala added.

The stock rights offer is raise P10 billion for the bank for expansion, possible acquisition, and to meet all domestic and international regulatory requirements and standards.

The P10-billion earnings from the stock rights offer is estimated to increase BPI’s potential capital excess to roughly P70 billion.

BPI president and chief executive officer Aurelio Luis R. Montinola III said that it has been the traditional of the Ayala-led commercial bank to look for every opportunity for growth.

“We look for every opportunity,” Montinola said, although he admitted that they had a preference for portfolio purchasing such as acquiring the loan portfolio of an existing bank as an alternative to bank acquisition.

BPI has a long tradition of mergers and acquisitions.

In the more recent part, the forefathers of BPI acquired People’s Bank and Trust Co in 1974 and followed this up by buying Commercial Bank and Trust Co in 1981.

In 1985, it bought Family Bank and Trust Co. before taking a long period of consolidation. Then in 1996, it gobbled up CityTrust Banking Corp.

One of its major acquisitions was Far East Bank and Trust Co. (FEBTC) in 2000 and DBS Bank Philippines in less than two years after.

In 2005, it acquired Prudential Bank and got an additional 187 branches.

It is presently following a five-year program, which is widely-perceived to result in another acquisition or consolidation.