March 23, 2015

BDO, AUB keen on Bank of Commerce stake

According to an article from the Philippine Daily Inquirer, BDO Unibank (BDO) and Asia United Bank (AUB) are interested to acquire Bank of Commerce (BOC) from local conglomerate San Miguel Corp (SMC). SMC mandated Citigroup to initiate an individual negotiation process, rather than conduct an auction with pre-set terms and conditions.

BDO is reportedly interested in acquiring BOC’s branches while AUB is in talks for a potential merger. Aside from the said banks, there are two other financial institutions which have expressed interest in BOC, one of which is Mizuho Financial Group of Japan.

Our take: If successful, BDO’s acquisition of BOC’s branches should enable to expand its network faster. It has recently acquired One Network Bank which added 90 branches to BDO’s network. Moreover, BDO can look into acquiring the branches of other banks in the selling block, such as United Coconut Planters Bank (UCPB). Over the medium to long-term, a wider branch network should bode well in enhancing BDO’s nationwide presence and its capability to generate low-cost CASA deposits. – WealthSec