Equitable president Rene Buenaventura said the bank has started entertaining offers for Mindanao Savings Bank, one of two thrift banks that the Go-controlled commercial bank has lined up for sale within the year.
Buenaventura said Equitable has received a number of verbal inquiries although prospective buyers have not formally put any offer on the table.
But he said the show of interest is an encouraging indication that the bank would be able to sell its subsidiary as scheduled.
Equitable PCI Bank currently owns three thrift banks, including Mindanao Savings Bank and Ecology Bank. If and when Mindanao Savings Bank is sold, only Equitable Savings Bank would remain.
Two years ago, Equitable sold PCI Savings Bank to the Hongkong and Shanghai Banking Corp. The HSBC acquisition has since been renamed HSBC Savings Bank.
East West Bank chief executive officer Jonathan Gotianun told reporters that they have begun a due diligence study for East West Bank’s purchase of Ecology Bank.
According to Gotianun, EWB is reviewing the documents of the transaction. He expressed confidence that the negotiations would be concluded shortly once the terms have been finalized.
The planned sale of Ecology Bank to East West Bank would take the form of a merger, qualifying it to avail of incentives such as staggered valuation of certain assets in its books.
However, the merger would have to be cleared by the Philippine Deposit Insurance Corp. (PDIC) for the transaction to qualify for merger incentives being administered by the Bangko Sentral ng Pilipinas (BSP).
Once East West Bank buys Ecology Bank, the thrift bank license would be surrendered to the Bangko Sentral ng Pilipinas. The purchase of the thrift bank would also add 30 branches to East West Bank’s network. At present, East West Bank only has 39 branches.
Sources said the deal will involve the purchase of the thrift bank’s assets, liabilities and branches by East West Bank with Equitable PCI Bank absorbing the foreclosed assets of Ecology Bank.
Banking sources said the attraction of the package is that it would leave East West Bank with a clean balance sheet. Moreover, Ecology Bank has both a trust and FCDU license.
The Philippines has 108 thrift banks but only 38 can accept dollar and other foreign currency deposits. And of the 38, only 17 have trust licenses. – Des Ferriols