BDO gets SEC nod for merger with units

The Securities and Exchange Commission (SEC) has given the green light for a four-way merger among Banco de Oro Unibank Inc. (BDO), Equitable Savings Bank, BDO Elite Savings Bank and PCI Capital Corp.

Based on the business plan, BDO will emerge as the surviving entity.

BDO Capital Corp. will assume all the investment banking functions of PCI Capital.

According to the report submitted to the SEC, Equitable and BDO Elite will be absorbed by BDO, resulting in the expansion of its branch network to 703, the most by any commercial bank in the country.

Metrobank used to be the largest in terms of branches. It is still the largest in terms of consolidated assets, net loans, deposits, and capital.

BDO said that the four-way merger “is in line with the BDO Group’s policy of streamlining operations and rationalization of the group’s organizational structure.”

“Cost savings are expected to be realized by consolidation of administrative functions, elimination of redundancies, and unified branding and advertising. The four-way merger will also optimize the capital structure of the group,” BDO chief information officer Elmer B. Serrrano said.

Earlier, BDO president and chief executive officer Nestor V. Tan said the productivity of the two thrift bank outlets will allow BDO to offer a wider array of bank products and services as branches of a universal bank.

He said the additional cost for the integration of the three former subsidiaries would come from its integration budget.

“We do not need additional capital expenditures, it is already budgeted,” the BDO chief executive added.

The integration started with the acquisition of Equitable PCI Bank in 2006 and the banking operations of American Express Bank.

BDO reported a P1.06-billion net income as of end September due to provisioning for potential losses on investments with bankrupt Lehman Brothers. Total provisioning so far has reached P4.28 billion.

Total resources however remained a healthy P743.49 billion while its capital adequacy ratio (CAR) stood at 13.7 percent. — With abs-cbnnews.com