| THE Securities and Exchange Commission (SEC) officially approved on Monday the merger between Banco de Oro (BDO) Universal Bank and Equitable PCI Bank, with Banco de Oro as the surviving entity.
The merged entity will create the second largest bank in terms of total assets; third biggest in net loans, second in deposits and third in branch network. At present, Metrobank is considered the country’s largest bank.
Also approved was the change in name to Banco de Oro-EPCI Inc. as well as the increase in the authorized capital stock of BDO to P65 billion, divided into P5.5-billion common shares and P1 billion preferred shares, all with a par value of P10 per share.
All of the foregoing approvals will take effect on May 31.
Banco de Oro’s annual stockholders meeting scheduled on July 27 and the record date set for June 15 are now the annual stockholders meeting and record date of the merged institution.
The integration of the banks networks entails huge spending and BDO said the group has the resources to support the procedure. The integration will be completed in 2008.
Teresita Sy, eldest daughter of shopping mall magnate Henry Sy and the one responsible for leading the merger, said she wanted to see the merged entity maintain market leading positions in their core business lines that include corporate and middle-market banking, consumer banking, credit cards, assets management, remittances, leasing and finance.
The respective board of directors of BDO and Equitable approved the merger plan last November 6, effecting the largest merger in Philippine banking history.
The combined company is expected to realize substantial revenues and cost synergies in the coming years.
There will be greater opportunities to expand fee-based income and cross-selling potential through the banks’ expanded product offering and customer base and through the SM Group network. The combined entity also expects to increase its low cost deposit gathering capabilities through its larger distribution network, said BDO president Nestor Tan.
At the end of the first quarter, BDO consolidated net income amounted to P838 million, helped by substantial increases in net interest income and fee-based income.
On the other hand, Equitable’s unaudited net income attributable to equity holders of the parent surged to P937 million, due to steady contribution of net interest income, a healthy growth in non-interest income, and conscious cost control.
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