Metrobank, Globalbank approve merger

The respective boards of directors of Metropolitan Bank and Trust Co. (Metrobank) and Global Business Bank (Globalbank) approved the merger of the two banks with Metrobank as the surviving entity. Together, Metrobank – the country’s largest universal bank – and Globalbank – the largest commercial bank – will form the Philippines’ most dominant financial institution with estimated total resources of P443 billion and combined capital over P50 billion.

In a joint statement to the BSP, SEC, and PSE, Metrobank and Globalbank said the "decision to merge was part of a strategic plan designed to further achieve cost efficiency and improve profitability by eliminating overlaps and redundant operations/infrastructures and rationalizing product and service delivery across one platform under one franchise."

The merger is in line with the thrust of BSP Governor Rafael Buenaventura towards consolidation in the banking sector to promote economies of scale with the resulting efficiency translating into better service. He added that a bigger capital base will enhance banks’ competitiveness here and in the region.

Metrobank’s performance is expected to further improve by the latter part of 2002 at a critical period of the economy and at a time when the bank’s integration process would have run its full course to reach cost efficiency, savings and profitability target levels. Metrobank’s previous mergers and acquisition experience is seen to result in a seamless integration similar to the consolidation process of Solidbank which yielded immediate gains through "quicker and better service and substantial savings of close to a billion pesos in annual operating and capital expenses."

The merger comes at the heels of a recently disclosed forecast of at least 25-percent growth in net income for the full year of 2001 compared to last year. Metrobank reported a P1.509-billion income for the first nine months of 2001, already surpassing 2000’s full year income of P1.504 billion. Globalbank, already majority-owned by Metrobank, likewise continues to perform well with a reported net income of P232 million in the first nine months of the year which is higher than 2000’s full year net income of P193 million.

The post-merger Metrobank will have a total of P353 billion in deposits and about P200 billion in loans. Its market capitalization will exceed P60 billion, positioning it within the top of 20 roster of the ASEAN region’s banks.