bpi-prudential bank merger and acquisition
DESCRIPTION
BPI-Prudential Bank Merger and Acquisition. Bank of the Philippine Islands. Incorporation Date: 04 January 1943 Listing Date: October 12, 1971 Number of Directors: 15 Ownership Restrictions: 40%. BPI. - PowerPoint PPT PresentationTRANSCRIPT
Bank of the Philippine Islands
Incorporation Date: 04 January 1943 Listing Date: October 12, 1971 Number of Directors: 15 Ownership Restrictions: 40%
BPI leader in electronic banking, having
introduced most of the firsts in the industry, such as: automated teller machines (ATMs), a point-of-sale debit system kiosk banking phone banking internet banking mobile banking
owned by the Ayala Corporation
Historical Background
Philippines’ and Southeast Asia’s oldest bank issuer of the country’s first currency notes in
1855 1st branch – Iloilo;1897 financed the following:
first tram service telephone system electric power utility first steamship in the country
Business Evolution
post World War II era, BPI evolved from a purely commercial bank to a fully diversified universal bank
accomplished mainly through mergers and acquisitions in the eighties when it absorbed an investment house, a stockbrokerage company, a leasing company, a savings bank, and a retail finance company
Business Evolution
Since the late 1990s – consummated three bank mergers
1996 – merged with City Trust Banking Corporation 2000
consummated the biggest merger then in the banking industry when it merged with the former Far East Bank & Trust Company (FEBTC)
formalized its acquisition of three major insurance companies in the life, non-life and reinsurance fields
2005 – acquired and merged with Prudential Bank
Business Milestones
April 2007 – Bank of the Philippine Islands (Europe) Plc
October 2008 – BPI, Ayala Corporation and Globe Telecom signed a Memorandum of Agreement to form the country’s first mobile microfinance bank
2009 – entered into a strategic bancassurance partnership with The Philippine American Life Insurance Company (Philamlife) to form BPI-Philam Life Assurance Corp
Principal Subsidiaries
BPI Family Savings Bank, Inc. BPI Capital Corporation BPI Leasing Corporation BPI Direct Savings Bank BPI International Finance Limited, Hong Kong BPI Express Remittance Corporation Bank of the Philippine Island (Europe) Plc, Ayala Plans, Inc. BPI/MS1 Insurance Corporation1MS = Mitsui Sumitomo
Top 5 Stockholders1
PCD NOMINEE CORPORATION (NON-FILIPINO)
AYALA DBS HOLDINGS, INC. AYALA CORPORATION PCD NOMINEE CORPORATION (FILIPINO) ROMAN CATHOLIC ARCHBISHOP OF
MANILA
1As of December 31, 2009
Prudential Bank
1952 – incorporated as an expanded commercial bank
June 2002 – celebrated its 50th anniversary in the banking business
Subsidiaries Prudential Venture Capital Corporation Prudential Investments, Inc. Pilipinas Savings Bank
Prudential Bank in Avenida, Manila
Prudential Bank
caters primarily to middle-marketbased entrepreneurs
The Bank of Tokyo-Mitsubishi, Ltd. holds 12% of the total shares which made it the majority shareholder before the acquisition took place
As of December 31, 2004, it operated a total of 187 offices/branches, consisting of the head office, 91 Metro Manila branches and 95 provincial branches.
Prudential Bank branch side by side with BPI branch in Naga
The Acquisition Process
September 1, 2005, BPI acquired 92% of the share capital of Prudential Bank, Inc. for cash consideration of P5,619 million
In accordance with the provisions of the plan of merger approved by the Bangko Sentral ng Pilipinas and the SEC on December 21 and December 29, 2005, respectively, BPI issued 9.99 million of its common shares with fair value of P515 million to the 8% Prudential minority shareholders
In the sale agreement, BPI bought 80 percent of Prudential from the Santos family, and later further increased its stake to 91.6 percent for P764.44 a share through a tender offering to minority shareholders.
Reasons
Jaime Augusto Zobel de Ayala, BPI’s Chairman, said the purchase would further "enhance" the operations of BPI with increased or widened network.
New incentive package by BSP with respect to mergers and acquisitions
BPI has been on the lookout for some good acquisitions in order to bolster its position as a rising regional financial powerhouse.
Reasons
The merger is seen to offer a good strategic fit to BPI in penetrating the attractive customer segment of Prudential composed mostly of middle market entrepreneurs.
With the merger, BPI will solidify its position as the country’s second largest bank with combined assets totaling P456.09 billion.
BPI expects to gain at least 200,000 new accounts with the acquisition.
Ranking BEFORE the acquisition
Asset Size Total Assets
Ranking Bank PHP, Mil
1 Metrobank 463,884
2 Bank of the Philippine Islands (BPI) 356,231
3 Land Bank of the Philippines 285,260
4 Equitable PCI Bank 284,282
5 Citibank 222,343
15 Security Bank Corp 80,106
16 Union Bank 76,874
17 Philippine Bank of Communications 55,792
18 Bank of Commerce 55,048
19 Prudential Bank 51,220
20 International Exchange Bank 46,406
Ranking BEFORE the acquisition
Deposits (PHP Millions)
Ranking
Bank Total Gov'tNon-Gov't
1 Metrobank 344,345 992 343,353
2 Bank of the Philippine Islands (BPI) 285,872 407 285,465
3 Land Bank of the Philippines 211,120 139,268 71,852
4 Equitable PCI Bank 185,030 154 184,876
5 Philippine National Bank 154,406 28,533 125,873
Total Deposits
15 Standard Chartered 42,713 105 42,608
16 Bank of Commerce 40,894 86 40,808
17 Prudential Bank 39,149 129 39,020
18 International Exchange Bank 36,668 30 36,638
19 Development Bank of the Philippines 36,007 23,651 12,356
20 Philippine Trust Company 34,276 - 34,276
Ranking AFTER the acquisition Top 5 banks in the Philippines (As of June 30, 2008)
Total Assets as of 30 June2008 (in Million Pesos)
Rank Bank Name Total Assets
1 Banco de Oro Unibank Inc. (BDO) 643,402
2 Metropolitan Bank and Trust Co.
(Metrobank)615,911
3 Bank of the Philippine Islands (BPI) 499,103
4 Land Bank of the Philippines (LandBank) 369,857
5 Development Bank of the Philippines
(DBP)322,749
Ranking AFTER the acquisition Top 5 Philippine Banks, in terms of Total
Deposits (2009) Banco de Oro (BDO) Unibank Metrobank (MBT) Bank of the Philippine Islands (BPI) Rizal Commercial Banking Corp (RCBC) Philippine National Bank (PNB)
Top 5 Philippine Banks, in terms of Net Income (2009) Bank of the Philippine Islands (BPI) Metrobank (MBT) Banco de Oro (BDO) Unibank UnionBank of the Philippines (UBP) China Banking Corp. – ChinaBank (CHIB)
Top 5 Philippine Banks, in terms of Total Assets (2009) Banco de Oro (BDO) Unibank Metrobank (MBT) Bank of the Philippine Islands
(BPI) Rizal Commercial Banking Corp
(RCBC) Philippine National Bank (PNB)