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By Maricel E. Burgonio, Reporter
TWO Lucio Tan-owned banks, Philippine National
Bank (PNB) and Allied Banking Corporation, will combine muscles to
climb to top slots in the industry and focus on expanding their
corporate and consumer lending businesses.
The merger will move PNB up from its sixth
position to fourth largest bank in the country with assets of P388
billion, dislodging LandBank of the Philippines from the slot.
PNB President Omar Byron Mier said the bank’s
board of directors had passed the resolution approving the plan to
merge, with PNB as the surviving entity, and will endorse the
approved plan to their respective shareholders for final
ratification.
Under the proposed terms, the merger will be
effected via a share-for-share exchange whereby PNB will issue 140
shares at P55 per share for every Allied common share held by Allied
Bank shareholders. PNB shares closed at P30.50 during Wednesday’s
trading.
The merged bank will retain the name PNB and
will issue additional 457 million shares.
“We put NPL (non-performing loans) aside,
which was our focus in PNB before. The focus of the bank will be on
remittance. We will double our efforts in consumer and corporate
lending,” Mier said.
The merger will increase PNB’s deposits to
P197 billion and total loan portfolio to P141 billion. However, it
will increase bad assets to P11.4 billion.
The merger will have capital adequacy ratio of
19 percent, above industry’s 14 percent and central bank’s
requirement of 10 percent and 15-percent return of equity.
“We don’t foresee offerings. We will not
expand capital base. We have a very comfortable CAR of 19
percent,” Mier said.
In terms of branch network, Mier said PNB will
keep its 626 local branches and 124 international offices.
He said the integration cost estimated at P1.2
billion to P1.3 billion will not pull down the bank’s profits this
year. “We’re going to see the effects of the merger in the
second year of the integration process. It’s very fluid at this
point,” he said when asked about net income target.
Mier said PNB expects to reclaim its number one
position in remittance business, having been dislodged by the Bank
of Philippine Islands, after the integration process.
The merger brings a combined complementary
client base ranging from large corporations, local governments,
government owned and controlled corporations, overseas Filipino
workers, Chinese and Filipino communities to provincial market.
“The merger will enhance our competitiveness
in the banking industry and widen our reach to customers with more
products and services and offerings,” Reynaldo Maclang, Allied
Bank president, said.
Their shareholders are scheduled to take up the
merger proposal at their meetings both set for June 24.
The Tan group, which includes tobacco, airlines,
breweries, beverages and real estate, will hold about 80.7 percent
of the shares in the merged bank, Mier said.
Tan had always hoped to merge the two banks but
was blocked by a government sequestration of Allied Bank shares
imposed after the late dictator and Tan’s close friend Ferdinand
Marcos was deposed in a popular revolt in 1986. On December 7 last
year the Supreme Court lifted a freeze on Allied Bank shares,
opening the door to the merger with PNB
The 71-year-old Fujian-born businessman set up
Allied Bank in 1977 and acquired majority control of PNB after it
was privatized in 1989.
-- With AFP
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