Malaysia's CIMB expects to seal Bancommerce deal within Q1

MANILA, Philippines - CIMB Group Holdings Bhd, Malaysia’s second largest lender, said it hopes to seal a deal to acquire a controlling stake in San Miguel Corp.’s banking unit Bank of Commerce in the first quarter this year.

At the same time, San Miguel confirmed it was in talks with CIMB for the acquisition of a stake in Bancommerce and said it would make the appropriate disclosure “in the event a definitive agreement is concluded.”

Reports quoting CIMB chief executive Nazir Razak said talks between San Miguel and the Malaysian bank are “progressing well” and expects to complete negotiations in the first quarter of 2012.

Negotiations with San Miguel, which holds 76.14 percent of Bancommerce, started last October.

Sources said CIMB is eyeing a 60 percent stake in the bank, which could be worth $231.3 million and equivalent to nine seats out of the 15-man board in the medium-sized lender.

Foreign ownership of local banks is limited to up to 60 percent.

Bancommerce had an asset base of $2 billion and capitalization of P16.96 billion as of June 2011. Total stockholders equity stood at P14.57 billion during the same period.

In 2010, it chalked in a net income of P629 million or about 1.2 percent of CIMB’s 3.5 billion ringgit net profit in the same period.

The deal, when completed, will mark CIMB’s first venture in the Philippines and further solidify its footprint in the ASEAN region.

The transaction, which is seen to bolster the company’s goal of becoming a regional universal bank, will open the door for future collaboration with the San Miguel Group in the Philippines and in Malaysia.

CIMB presently has presence in 14 markets across the globe.

Malaysian lenders have been branching out into neighboring markets to spur growth.

Bancommerce, on the other hand, has been in operations since 1991. It offers a wide range of banking and other financial products and services, including traditional deposit products, corporate banking, consumer banking, treasury, asset management, trust services, trade, and credit card services.