BSP okays BPI divestment in FEB Savings Bank

The Bangko Sentral ng Pilipinas (BSP) has approved the sale of the Bank of the Philippines Islands (BPI) owned Far East Savings Bank Inc. (FEB) to an JTKC Equities Inc., Surewell Equities, Inc. and Star Equities Inc.

In a disclosure to the Philippine Stock Exchange (PSE), BPI said it has sold 100 percent of its equity holdings in FEB Savings.

"The said BSP approval was the last act needed to complete the transaction," the Ayala-led bank’s letter stated.

The new owners will rename the FEB Savings into Sterling Bank of Asia Inc.

JTKC is a major shareholder in companies involved in a wide range of industries, ranging from logistics to finance, real estate, manufacturing and hotel and resort properties. Besides its investments in well-known brands such as the MansionGroup and Discovery Suites, JKTC has been actively involved in real estate, developing, managing and operating first-class serviced apartments.

Surewell Equities Inc., meanwhile is a real estate company engaged in property development, vertical and horizontal projects located in Metro Manila and nearby towns.

However, the transaction’s value was not disclosed, saying only the deal involved the sale of the remaining branches left over from the merger of BPI with Far East Bank and Trust Co. in 2000.

BPI, the country’s fourth most valuable firm with a market value of around $3.4 billion, is expected to post a 10.4-percent increase in full-year net profit to P9.27 billion, according to Reuters estimates.

For the first nine months of 2006, BPI posted P2.3 billion in consolidated net income. From January to September, the consolidated net income of the country’s second largest lender also rose to P6.9 billion, eight percent higher than the previous year.

In a statement, BPI traced its net income rise to the seven-percent increase in total revenues, as well as on lower bad debt provisions.

Net interest income or profit from lending posted a moderate four-percent expansion to P2.67 billion, owing to an 11-percent growth in the average asset base.

"The impact of the higher volumes was softened by a 25-basis-point drop in spreads as interest rates fell due to excess liquidity, improved government finances and contained inflation," the bank said.

Meanwhile, non-interest income went up by 14 percent, with major gains coming from securities and foreign exchange trading, property rentals, investment management and trust fees, and service charges and commissions.