GSIS sets bidding for GSIS Family Bank

MANILA, Philippines - The Government Service Insurance System cleared a major legal hurdle to proceed with the sale of its majority stake in GSIS Family Bank, the top official of the state-run pension fund said.

In a briefing, GSIS president Robert Vergara said the agency intends to conduct a public bidding for the bank within the next three months after a local court  lifted an order preventing the pension fund from selling its 99 percent stake in GSIS Family Bank.   

“It would be a complete disposal of our 99 plus percent stake.  The legal obstacle has been resolved,” Vergara said.

The lifting of the restraining order likewise paved the way for the reinstatement of incentives to investors interested in acquiring the GSIS Family Bank.   

With the reinstatement of the incentives,  the GSIS Family Bank remains an attractive target as  the buyer will get to open additional branches and relocate several of the bank’s existing 22 branches anywhere in the Philippines including restricted areas, Vergara said.   

Other incentives include converting the bank into a commercial bank with authorities to engage in expanded foreign currency deposit unit, trust and quasi-banking functions as well as continuing GSIS Family Bank’s authority to accept government deposits from the state pension fund and the municipalities of Cavite until revoked by the central bank.

“GSIS Family Bank may be a mid-sized bank but it is valuable to those intending to enter the Philippine banking industry or expanding from thrift to commercial bank status,” Vergara said.

The liberalization of the Philippine banking industry is also expected to boost the pension fund’s chances of disposing its stake in GSIS  Family Bank. GSIS acquired the bank in 1986.

Two foreign investor groups – China’s largest bank, Industrial and Commercial Bank of China Ltd. and Paris-based BNP Paribas – earlier expressed interest to acquire GSIS Family Bank.    

“We haven’t actively marketed the bank.  We need to move quickly to preserve whatever value it has. Lets see if we can finally conclude the sale share and put the bank in the hands of a solid player,” Vergara said.       

The GSIS has tapped the Development Bank of the Philippines as financial advisor for the valuation of shares in GSIS Family Bank.   

GSIS Family Bank earlier had a valuation of between P520 million and P670 million

When the bank was offered for sale in 2006, its original owner, the Dragon family of Cavite filed a case with the Makati Regional Trial Court  which in turn  issued an injunction against the sale.