Philam Savings Bank buys AIG card business

Philam Savings Bank has acquired AIG Credit Card Co. in a bid to expand its market base in the card industry which has a potential market of another five to six million. Presently, the credit card base stood at almost five million.

The surviving entity will be named AIG Philam Savings Bank with combined resources of over P10 billion and authorized capital to reach P800 million.

"That will, however, mean a modest net income target for 2006 of P170 million," AIG Consumer Finance Group Inc. Joven D. Reyes said, adding that a faster pace of growth is expected in the following years.

AIG Consumer Finance Group and Philippine American Life and General Insurance Co. (Philamlife) controls the thrift and savings bank, and the credit card business is fully owned by AIG Consumer Finance Group.

The acquisition will catapult the thrift bank from ninth to one or two notches higher within the thrift banking system. The banking subsector is bannered by the BPI Family Savings Bank and the Philippine Savings Bank, subsidiaries of the Bank of the Philippine Islands (BPI) and the Metropolitan Bank and Trust Co. (Metrobank), respectively.

The card business already accounts for two-thirds of its consumer banking business, with the remaining one-third from auto loans.

Reyes intimated that they will be introducing new lending products including mortgage and personal loans in a bid to improve its competitiveness. Yet, the card business will remain the biggest bottomline earner with the rest of the lending efforts accounting for the remaining half of the loan portfolio.

Officials likewise admitted that they are in the market for acquisitions.

"We want to grow organically, or through acquisitions, to be competitive and barge into the top five in the thrift banking system," he added.

The savings bank presently have eight branches with one more in October. Five of the existing branches are located in Metro Manila.

"We are looking to acquire branch licenses from the Philippine Deposit Insurance Corp. (PDIC) or buy banks with the right synergy mix," AIG officials added.