BPI Merger With Gokongwei To Contend With Competitors

Bank of the Philippine Islands (BPI), the country’s third largest lender, recently acquired a ₱27 billion merger with Robinsons Bank, part of the Gokongwei family conglomerate JG Summit Holdings, to compete with bigger rivals.

“The merger will also expand BPI’s access to the network of the Gokongwei Group, especially to the Filipino-Chinese market segment, which has been the significant advantage of our closest competitors,” BPI president and CEO Jose Teodoro K. Limcaoco said.

Limcaoco said the bank would benefit from access to the network of JG Summit, which owns food and drinks manufacturing giant Universal Robina Corp., property developer Robinsons Land Corp. and Cebu Pacific, the country’s top budget airline.

Limcaco mentioned that the merger will be completed by Jan. 1, 2024.

Limcaoco also said the deal would give Gokongwei companies JG Summit and Robinsons Retail Holdings a 6% stake in BPI shares to increase revenues by about 7% and profits by 5-6%.

Robinsons Retail also closed a separate deal to acquire 4.4% of BPI, giving the Gokongweis more than 10% ownership.

The merger will allow 162 branches of Robinsons Bank to convert to BPI, which will lead to a broader “rationalization” of its operations but would not cause any job cuts.

“The merger should not result in any layoffs on either side. They have an excellent workforce. We believe there is room for everyone in a merged entity,” Limcaoco said.

Moreover, BPI head of consumer banking Maria Cristina “Ginbee” L. Go said plans to reorganize the physical branch network will include the “digitalization” of the banking industry and redundancy in the locations of their outlets.

BPI said the alliance with JG Summit would help achieve its goal of raising consumer loans to 30% of its total loan bank.

The bank’s shareholders also approved the increase in its authorized capital by ₱4 billion to cover shares issued to Robinsons Bank shareholders following the merger.

In September 2022, BPI recorded over 9.1 million depositors with assets amounting to ₱2.5 trillion.

Source: Inquirer.net