The Merging and Acquisition of Banco De Oro and Equitable PCI Bank PDF

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TheMer gi ngandAcqui si t i onofBancoDeOr oandEqui t abl ePCIBank 

BDO,knownasAc meSavi ngsBank ,wasacqui r edbyt heSM Gr oupi n1976.Unt i l 5Augus t 1996,wheni twasgr ant edf ul luni v er s al banks t at us ,t heBank ’ smai nbus i nes swaspr ov i di ng t r adi t i onal l oananddeposi tbank i ngs er v i c est ot hemi ddl emar k etsegment ,i nc l udi ng cor por at esuppl i er sofSM.

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BDO l i st edi t sshar esi nt hePhi l i ppi neSt ockEx change( PSE)on21May2002.

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OnJ une15,2001,BDO mer gedwi t hDaoHengBank' sPhi l i ppi nes ubs i di ar y ,wi t hBDO as t hesur vi vi ngent i t y . DaoHengBank

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Asof29December2005,BancodeOr or ank ed5t hi nt er msofr esour cesandl oans ,6t h i nt er msof depos i t s ,and8t hi nt er msofcapi t alamongt he41commer c i al bank si nt he i ndust r y .

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Equi t abl ePCIBanki sacommer ci albankwi t hanex pandedbanki ngl i cense.

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I ti st het hi r dl ar ges tpr i v at edomest i cbanki nt hecount r yi nt er msofr esour c es ,capi t al , deposi t s ,andl oans .Offer i ngt r adi t i onal andi nnov at i v edepos i tpr oduct sands er v i c es ,cas h management ,i nt er nat i onal bank i ng,commer ci al andcor por at ebanki ng,moneymar k et ,t r us t andt r easur ys er vi ces ,t heBankcat er st ot heneedsofcor por at e,mi ddl emar k et ,andr et ai l c l i ent s.

6 Combi ni ngt hei ndi v i dual st r engt hsofEqui t abl eBankandPCIBank ,t hemer geri n1999c r eat ed as t r ongpr esenc ei nsi gni fic antmar k etsegment spar t i c ul ar l yt hec or por at eandFi l i pi noChi nes e mi ddl emar k et . Mor eov er ,Equi t abl ePCIBank’ sext ens i v edi st r i but i onnet wor kpr ovi dest hec r i t i cal masst of ur t herf or t i f yt heBank ’ spos i t i oni nt hecons umer / r et ai ls ec t orasi tpr esent si ncr eased oppor t uni t i esf orc r oss sel l i ngot herr et ai l pr oduc t s .

7 Equi t abl ePCIBankenj oy smanyadv ant agesast het hi r dl ar ges tpr i v at edomes t i cbanki nt he Phi l i ppi nes . TheBankhashadal onghi s t or yoffinanci al s t r engt hands t abi l i t yandhol dsl eadi ng posi t i onsi nk eybusi nesss egment s . I thasast r ongpos i t i oni nt hemi ddl emar k etandi nt he cor por at emar k et .I tenj oy sal ar gepr esence,wi dec us t omerbase,andex t ensi v edi s t r i but i on net wor k .TheBankhasabaseofdi v er si fiedwel l es t abl i shedfi nanci al ser v i c esbus i ness es ,whi ch f ur t herbol st eri t spos i t i on

8 I nc r edi tcar ds ,Equi t abl eCar dNet wor kdomi nat est hel ocalc r edi tcar di ndus t r yasmer c hant acqui r er ,andt hi r dpar t ypr ocessor . Thi spr ov i desgoods copef ort heBankt oi ncr easei t sr et ai l l endi ng. PCILeasi ngandFi nancei soneoft hemostpr ofi t abl efinanc ecompani eswi t hahi gh c api t albaseandwi der eac h.

9 PCICapi t alCor por at i oni swel lr ecogni z edf orbei ngadomi nantpl ay eri ni nv es t mentbanki ng Capi t al i z i ngoni t ssi z eandl ar gecus t omerbas e,t heBankal s ocont i nuest oi nv esti nt echnol ogyand i sabl et ot ak eadv ant ageofec onomi esofscal e. 10 EPCIBEFOREMERGI NG =0. 179150%  BDO BEFOREMERGI NG =1. 088067%  BDO AFTERMERGI NG =0. 707700%

11 ( EPCIASOF2005)=0. 8183%  ( BDO ASOF2005)=2. 9273%  ( BDO ASOF2009)= 3. 5496%

12 Apl anbyt heSM Gr oupofCompani esandBancodeOr oUni v er s al Bankt omer gewi t h Equi t abl ePCIBank Las tNov ember2006t hei rr espect i v eBoar dofDi r ec t or spass edr esol ut i ons appr ovi ngapl ant omer get het woc ompani es

13 Toser v ei t scus t omer sbet t erandmor eeffic i ent l yt hanei t heri nst i t ut i onal one Toi nv es ti nt he mostupt odat et ec hnol ogyanddev el opmor ei nnov at i v epr oduct swhi c hwi l lbenefi tbot hr et ai land cor por at ecust omer s Wi l l bebet t erabl et oupgr adei t sr i skmanagementandI Ts y s t emsi nor dert o addr essBasel I Ir equi r ement s .

14 Amer gerwi t hEPCIwoul dt r ans f or m BDO i nt oadomi nanti ndus t r ypl ay er ,pos sessi ngmar k et l eader s hi pandoper at i onals cal ewhi l eenhanci ngshar ehol derv al uet hr oughapot ent i alr e-r at i ngi n t heshar epr i ceandr educedf undi ngc os t .

16 Osmenav.Soci alSecur i t yCommi ss i on,G. R.No.165272,Sept ember13,2007 OnAugust5, 2005,BancodeOr oandSM I nv est ment sCor por at i on,anot hermemberoft heSM Gr oup,ac qui r ed 24. 76% ofEqui t abl ePCIshar esf r om t heGof ami l y ,t hef ami l yt hatf oundedEqui t abl ePCI .SM I nv es t ment sCor por at i on

17 OnJanuar y6,2006,Banc odeOr ooffer edt obuyt her es tofEqui t abl ePCIf or41. 3bi l l i on pes ost hr oughas har es wapopt i on,wi t hBancodeOr oast hesur v i vi ngent i t y .Undert hedeal ,ev er y oneEqui t abl ePCIshar ewoul dbes wappedf or1. 6BancodeOr os har esor ,i nasecondopt i on,an i ndependentaccount i ngcompanywoul ddet er mi net hes wapr at i oont hebookv al uesofbot hbank s underI nt er nat i onalAccount i ngSt andar ds . swapr at i oI nt er nat i onalAccount i ngSt andar ds 18 OnNovember6,t her espect i v eboar dsofBancodeOr oandEqui t abl ePCIBankagr eedt ot he mer gerofbot hbankst hr oughamodi fi eds t oc ks wapdeal .I ns t eadoft heor i gi nal 1. 6s har esBanc o deOr owoul dswapf or ,i twoul dswap1. 8s har esf orev er yEqui t abl ePCIshar e OnDecember27, 2006,BancodeOr oshar ehol der sappr ov edt hemer gerwi t hEqui t abl ePCIBank .Equi t abl ePCI Banks har ehol der sal soappr ov edt hemer gert hes ameday .I nor derf ort hemer gert ot ak eeffect , appr ov al f r om bot ht heBangk oSent r al andt heSecur i t i esandEx changeCommi ssi oni sr equi r ed, whi chwasobt ai nedi near l y2007.

19 Regul at or yappr ov al f r om t heBangk oSent r alwasgr ant edonApr i l 25,2007. OnMay31, 2007,t r adi ngofBancodeOr oandEqui t abl ePCIBankshar eswer esus pended,wi t hEqui t abl ePCI Banks har esbei ngdel i s t edf r om t hePSE Equi t abl ePCIBankbr anc hesar ei nt hepr oces sof becomi ngBancodeOr obr anc hes .Thel egal nameoft hebankr emai nedBancodeOr oEPCI ,I nc . unt i lFebr uar y2008,wheni twasfi nal l ynamedBanc odeOr oUni bank,I nc . 20 PROS-BancodeOr owoul dmov eupi nt ol ar gec api t al i z edc ompanyst at us ,definedasa companywhosecapi t al s t andsatami ni mum of$700mi l l i on.Themer gerofbot hbank swoul dr esul t i nt hemer gedcompanyhav i ngamar k etcapi t al i z at i onoft wobi l l i ondol l ar s . $-ThenewBancode Or owoul dhav eat ot al of685br anc hesandawi der eachi ngATM net wor k .Thus ,awi der conv eni encet obot hBDOandEqui t abl ecus t omer s.

21 CONS-Tr ans i t i onc oul dmos t l yr esul twi t ht heconv er si onofATMs :Equi t abl ePCIFas t el l er s ar el i nk edt oMegaLi nkwhi l eBancodeOr oSmar t el l er sar el i nk edt oEx pr es snet .Al s o,Equi t abl ePCI ATM car dsar el i nk edt oVi saEl ect r onand/ orPLUSwhi l eBancodeOr oATM c ar dsar eei t herl ocal or ,i nt hec aseoft henewBDO I nt er nat i onalATM Car d,l i nk edt oMas t er Car d( br andedas Mast er Car dEl ect r oni c) ,Maes t r oandCi r r us . MegaLi nkExpr essnet Vi saEl ect r onPLUS Mast er Car dMaest r oCi r r us-I twoul dt r i ggerawa v eofmer ger sandacqui si t i onst hatcoul dr es ul ti nan ol i gopol y ,wi t honl yf ewcompet i t or s ol i gopol y 22 “ Thepr opos edmer gerofBDO andEPCIwi l l cr eat eabi ggerands t r ongeri ns t i t ut i onwhi chwi l l beamongt hel eader si nt hei ndus t r y .I tal soc ont i nuest hepr oc essofconsol i dat i on,whi chwe bel i ev ei sposi t i v ef ort hePhi l i ppi nebanki ngs y s t em. ”Gov er norAmandoTet angc o,Bangk oSent r al ngPi l i pi nas 23 “ Themer gerofBDO andEPCIr ai sest hebarofcompet i t i onf ort hePhi l i ppi nebanki ngi ndust r y . I ti sgoodf orfi nanci als t abi l i t yandgoodf orcus t omerser v i ce. ”Deput yGov er norNest orEs pi ni l l a, Bangk oSent r al ngPi l i pi nas

25 hasappr ov edt hemer gerofBancodeOr oUni v er salBankandEqui t abl ePCIBankwi t hBDO  r enamedasBanc odeOr oEPCI ,I nc

26 698br anches 1, 171Aut omat edT el l erMachi nes( ATMs )nat i onwi de t hi r dl ar ges ti nt he count r yi nt er msofbr anc hnet wor k . 27 I n2001,t hebankac qui r edt hePhi l i ppi nesubsi di ar yofDaoHengBank ,gr owi ngi t sbr anch net wor kby12. I nApr i l2005,t hebankf ur t herexpandedbyac qui r i ngbr anc hesofUni t edOv er s eas Bank .

28Bank( asof2005) Gr ossRev enues( Pmi l l i on)1. Met r opol i t anBank&Tr us tCo. 39, 7312.Bankof t hePhi l i ppi ne376843.Equi t abl ePCIBank ,I nc . 26, 0424.LandBankoft he24, 5655.Banc oDe Or o22, 2256.Phi l i ppi neNat i onal Bank18, 3807.Dev el opmentBankoft he18, 2718.Chi naBanki ng Cor p. 14, 4359.Ri z alCommer ci al Banki ngCor p. 14, 08610.Uni onBankoft he11, 717

291. BancodeOr o( BDO) Php634. 3bi l l i on1. Met r obankPhp585. 8bi l l i on1. Bankoft hePhi l i ppi ne ( BPI ) Php541. 2bi l l i on1. Landbankoft hePhp333. 6bi l l i on1. Phi l i ppi neNat i onalBank( PNB) Php201. 2 bi l l i on1. Ri z al Commer ci alBanki ngCor p.( RCBC) Php196. 4bi l l i on1. Chi nabank Php173. 9bi l l i on 1. Uni onBankoft hePhp162. 0bi l l i on1. Al l i edBank Php139. 8bi l l i on1. Ci t i bank Php187. 8bi l l i onAs set s

30Deposi t s1. BancodeOr o( BDO) Php808. 0bi l l i on1. Met r obank Php758. 5bi l l i on1. Bankoft he Phi l i ppi ne( BPI ) Php658. 4bi l l i on1. Landbankoft hePhp434. 0bi l l i on1. Dev el opmentBankoft he ( DBP) Php290. 9bi l l i on1. Phi l i ppi neNat i onalBank( PNB) Php276. 8bi l l i on1. Ri z alCommer ci al Banki ngCor p.( RCBC) PhP270. 2bi l l i on1. Uni onbankoft hePhp208. 2bi l l i on1. Chi nabankPhp207. 3 bi l l i on1. Ci t i bank Php187. 8bi l l i on...