City Savings Bank Inc (CitySavings), the thrift banking arm of listed lender Union Bank of the Philippines (UnionBank), is acquiring smaller rival Philippine Resources Savings Bank (PR Savings Bank) for an undisclosed amount.
In a regulatory filing on Tuesday, UnionBank said CitySavings Chairman and UnionBank Senior Vice President Eugene Acebedo signed a share purchase agreement with Ropali Group chairman Roberto Alingog to acquire 100 per cent of the common shares of PR Savings Bank.
The Ropali Group of Companies, a mid-sized conglomerate that is a leading player in the motorcycle and agricultural machinery trade, owns 127,723,385 common shares in PR Savings Bank, equivalent to 66.27 per cent of the Isabela-based bank.
“This acquisition will expand our mass market reach, consistent with our vision to promote inclusive growth in the country,” said UnionBank President and incoming CEO Edwin R. Bautista.
The total purchase price is less than 10 per cent of the total book value of UnionBank. The bank has a book value of P68.36 per share as of 2016.
The acquisition represents new opportunities for CitySavings to substantially expand its reach in Luzon, as well as enter new market segments such as motorcycle and agri-machinery financing, UnionBank said in a statement.
It added that the acquisition is in line with the Bangko Sentral ng Pilipinas’ efforts to improve financial inclusion in the Philippines and strengthen the banking industry through mergers and consolidation.
PR Savings Bank is the 14th largest thrift bank in the Philippines, with assets of P12.917 billion. It is currently engaged in extending motorcycle, agri-machinery and teachers’ salary loans to over 131,000 borrowers.
CitySavings is the fifth largest thrift bank in the Philippines in terms of assets, with P74.444 billion as of 30 June 2017. It has 106 offices across the country.
Pending closing conditions and regulatory approval, the deal is expected to complete in the second quarter of this year.