Aboitiz Equity Ventures acquires Cebu thrift bank for P1.36 billion

MANILA, Philippines - Aboitiz Equity Ventures Inc. (AEV) is acquiring indirect full ownership of Cebu-based thrift bank City Savings Bank (CSB) for P1.36 billion.

In a disclosure to the Philippine Stock Exchange, AEV said its board approved the purchase of up to 60 percent of CSB with the remaining 40 percent to be acquired by its wholly-owned unit Pilmico Foods Corp.

AEV, which currently owns 34 percent of CSB, said the acquisition of the additional stake is still subject to approval by regulatory authorities.

According to AEV, the acquisition would provide CSB with greater access to resources to sustain its high level of growth and to drive further expansion. 

‘The support that AEV can give CSB is vital to catapult the bank to its ambitious growth plan in the years to come,” said AEV president and chief executive officer Erramon Aboitiz. 

CSB currently has over 300 employees serving over 90,000 borrowers and more than 53,000 depositors. It has 12 full branches and 11 extension offices in the Visayas and Mindanao areas.

CSB has total capital funds of over P700 million and total resources of over P6 billion.

As a thrift bank, CSB is primarily engaged in offering loans to school teachers under the Department of Education’s Automatic Payroll Deduction System. Teachers have been the main market of CSB since it began operations over 40 years ago.

The bank’s other products include salary loans to government and private sector employees, home mortgage and home improvement loans, as well as small business loans.

CSB has one of the best operating efficiencies in the thrift banking industry with a low past-due ratio and among the highest capital adequacy ratios.

For the last five Bangko Sentral ng Pilipinas (BSP) examinations, covering a period of 10 years, CSB has received an average CAMELS rating of “4”, which indicates its ability to withstand unfavorable outside influences.

In March 2009, CSB issued P1 billion worth of five-year peso-denominated corporate fixed rate notes via a private placement to primary institutional lenders. Proceeds from the issuance were used to augment the bank’s funding base and support its long-term asset growth objectives.

AEV is the publicly listed holding company for the Aboitiz Group’s investments in power, financial services, food and transport.