The new company, named BDO Card Corp. (BDOCC), has applied for a corporate license with the Securities and Exchange Commission. It has an initial authorized capital of P100 million, composed of one million shares with a par value of P100 per share. Of this amount, P60 million has been subscribed and paid by BDO.
Other groups that have subscribed to BDOCC’s shares are SM Investments Corp. (P19 million) and three other investment holding firms of the Sy family – Henfels Investment Corp., Tangiers Resources Corp., and Sanford Investments Corp. (P7 million each).
Listed as officers and directors of BDOCC are Teresita Sy (chair), Jesus Nacinto (vice-chair), Josefina Tan (president), and Nestor Tan (director).
BDO’s plan to establish a credit card firm was approved by the Bangko Sentral ng Pilipinas in June on condition that no additional investments in said subsidiary shall be made by BDO without the prior approval of the BSP.
BDO has been focusing its efforts on beefing up its product portfolio to keep up with customers’ preferences. The bank said that while it may not be the pioneer of certain products in the market, BDO makes sure that when it launches a new product, it will work well and fulfill the ever-changing expectations of the public.
A BDO official said the company’s move to go into the credit card business was due to the promising opportunities in this market. "There is more than enough room to expand. The industry has penetrated only 45 percent to the card-able population of about 13 million," the official said.
To make its presence felt in the credit card business, BDOCC intends to forge partnerships with utility firms such as those in the power, water and airline sectors, as well as in industries which focus on the consumers’ daily needs, where transactions are usually in high volume and on a recurring basis.
To finance its new business, BDO was recently granted a $20- million loan by the International Finance Corp. The loan carries a five-year term with interest rate that is significantly lower than the bank’s current average cost of money. With the loan agreement, IFC will have the option to convert the loan into new common shares of BDO on the third year of the five-year maturity period.
The loan will be used to expand BDO’s branch network and lending operations.
BDO is in negotiations with three other banks for the possible acquisition of additional branches to keep up with the expansion of Sy’s SM malls nationwide. – Zinnia dela Peña