The Gokongwei Group has opted to sell Robinsons Bank Corporation (RBC) for a 6 percent stake in Bank of the Philippine Islands (BPI) to spare itself the burden of raising a huge amount of capital to scale it up.
“We reviewed our strategic options to determine its future and we are cognizant that banking is a scale game and will continue to require additional capital for growth,” JG Summit President and CEO Lance Y. Gokongwei said.
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He noted that, “Through the years, the Gokongwei Group has built and supported the growth of Robinsons Bank from a small savings bank to become one of the fastest- growing, full-service commercial banks in the country today.”
“We believe that merging Robinsons Bank with BPI, which is one of the strongest and most profitable banks in the country, is the best path forward. This will give our customers access to a fuller range of banking products and services as the combined organization will leverage on ecosystems of both the Gokongwei and Ayala Groups,” said Gokongwei.
He added that, “The Merger will also open more opportunities for our talented employees given that BPI will continue to grow, evolve and adapt to the rapidly changing market environment.” The planned merger of BPIBPI and RBC was formally announced after the approval by the respective boards of directors of the two banks and their parent companies.
This was disclosed to the Philippine Stock Exchange by BPI and RCB’s shareholders Robinsons Retail Holdings, Inc. and JG Summit Capital Services Corporation (through parent company JG Summit Holdings Inc.).
They approved the execution of an agreement between BPI, RBC, and the RBC Shareholders for the merger of BPI and RBC, with BPI emerging as the surviving entity, subject to shareholders and regulatory approvals.
Upon the effectivity of the Merger after receipt of all necessary corporate and regulatory approvals, the RBC Shareholders will collectively hold approximately 6 percent of the resulting outstanding capital stock of BPI although the ratio of exchange of shares has yet to be announced.
Regulators that need to approve the merger include the Philippine Competition Commission, the Bangko Sentral ng Pilipinas, the Philippine Deposit Insurance Corporation, and the Securities and Exchange Commission.
“The Merger, which the parties hope to complete before the end of 2023, will unlock various synergies across several products and service platforms and expand the customer and deposit base of both banks through the merged entity,” the disclosures said.
At the same time, by capitalizing on BPI’s expertise and network, the Merger will lead to enhancement of the overall banking experience of RBC customers.
RBC’s products and services cater to its corporate, commercial, and retail clients through its 189 branches and branch-lite units (including 14 branches and 14 branch-lite units of its subsidiary, Legazpi Savings Bank), 354 ATMs, and online and mobile banking channels.
As of June 30, 2022, RBC has total assets of P175.9 billion, including net loans and receivables of P102.4 billion, and total liabilities of P156.0 billion, including deposits of P139.0 billion.
“We are excited about this transaction and believe that this Merger exemplifies BPI’s strategic effort to expand its client base, accelerate growth, and ultimately increase shareholder value through partnerships with the Gokongwei Group,” BPI President and CEO Jose Teodoro (“TG”) Limcaoco said.
He added that, “We plan to effect a smooth transition and integration of RBC and its customers into BPI. Together, we aim to maintain quality banking services and offer additional best-in-class and innovative products to our expanded client base.”
“We are also keen on strengthening our ties with the Gokongwei Group even more through various collaboration opportunities across the Gokongwei Group’s vast ecosystem,” Limcaoco noted.
Robinsons Retail President and CEO Robina Gokongwei-Pe said, "Retailing has always had a close relationship with banking in many markets around the world, and especially here in the Philippines. This is because of the breadth of services it offers to its customers, coupled with its broad and rich eco-system of suppliers and business partners, that need banking services to grow and thrive.”
“This is what we believe this merger between BPI and Robinsons Bank will bring -- the coming together of the innovativeness of Robinsons Bank, the scale and breadth of BPI, and the retail and commercial eco-system of both the Gokongwei Group and the Ayala Group,” she explained.