TA Bank, ABN Amro near completion of merger talks

TA Bank, now 60-percent owned by Manila Bank of the Philippines of the Puyat family, is close to firming up a merger with Dutch bank subsidiary ABN Amro Savings Bank.

Bangko Sentral ng Pilipinas (BSP) Deputy Governor Alberto Reyes said TA Bank and ABN Amro are ‘on the verge’ of forging a memorandum of agreement that will seal their union.

No other details were disclosed or could be confirmed from officials of both banks.

Last year, the BSP approved Manila Bank’s 60-percent acquisition of TA Bank, then controlled by Malaysian investors.

The merger was supposed to have paved the way for an upgrade of Manila’s license from a thrift bank into a commercial bank which TA Bank held. Under the purchase deal, Manila Bank initially acquired 60 percent of TA Bank for P1.35 billion and was programmed to eventually absorb the remaining 40-percent stake held by various stockholders.

Buying a commercial bank was one of the several options for some investors to go around the BSP moratorium on the approval of new bank license and branches.

TA Bank, with four branches in Metro Manila, was one of the banks that failed to meet the P2-billion minimum capital requirement imposed by BSP in end-1998. Malaysian investors failed to pump new money into the bank because of capital controls imposed by the Malaysian government at the height of the regional financial crisis in 1997-98.

ABN Amro meanwhile, the world’s sixth largest bank, opened an offshore banking unit in the Philippines in 1984. Last year, it acquired 60 percent of Great Pacific Savings Bank which was renamed ABN Amro Savings. The thrift bank has 25 branches and more than 500 employees.

Late last year, ABN Amro Savings Bank announced plans to close some of its local bank branches as part of a major reorganization resulting from its acquisition of Great Pacific Savings Bank.

ABN Amro Saving Bank has also earlier expressed its intention to secure a license upgrade and become a commercial bank. Like Manila Bank, however, it is prevented by the new General Banking Act (GBA) from getting a new license in the next two years.

The GBA also allows foreign banks to acquire up to 100 percent of a local bank. – Rocel Felix