Scotiabank may acquire Asian Bank

In what many may consider as a surprise move, the Bank of Nova Scotia may end up acquiring Asian Bank, which Metropolitan Bank and Trust Co. recently acquired, in exchange for BNS's 40 percent equity in Solidbank.

Metrobank has acquired 51 percent of Solidbank from the Madrigal Family and another shareholder, Lim Ka Thong.

This possibility was revealed over the weekend by Finance Secretary Jose T. Pardo after he met with top officials of BNS last week. Pardo said top BNS officials assured him that they are committed to stay in the country.

The BNS officials, Pardo said, expressed their intention to continue their investment in the country even as they prepare to sell their shares in Solidbank to Metrobank. According to Pardo, the BNS officials informed him that they are definitely getting out of Solidbank as they do not want to become a minority shareholder in Metrobank when Solidbank is merged with the much bigger institution.

The BNS officials, Pardo said, had indicated that they would instead look for a much smaller bank to acquire.

Pardo said he suggested AsianBank, Philbank and even the Philippine National Bank as some of the banks which BNS could look at. Pardo said BNS could acquire AsianBank from Metrobank as part of their deal.

BNS and Metrobank are still negotiating over the price Metrobank would pay for BNS's 40 percent stake in Solidbank.

Metrobank had paid 2.5 X times book value for the combined 51 percent stake of the Madrigal Family and Lim Ka Thong. However, Metrobank is not willing to pay the same premium to BNS for it's minority stake.

On the other hand, BNS does not want to become even more of minority shareholder if Metrobank merger with Solidbank. If such a merger takes place, BNS's stake in Metrobank will be dilluted to a mere six percent.