UnionBank sets aside P6.12 B to acquire PR Savings Bank

MANILA, Philippines — Union Bank of the Philippines, through its subsidiary City Savings Bank Inc., is set to take over Isabela-based thrift bank Philippine Resources Savings Bank for P6.12 billion.

In a disclosure to the Philippine Stock Exchange, the Aboitiz-owned bank said it has signed a share purchase agreement (SPA) with the Ropali Group to acquire 100 percent of the common shares of PR Savings Bank.

Ropali Group chairman and founder Roberto Alingog signed the agreement with CitySavings Bank chairman and UnionBank senior executive vice president Eugene Acevedo.

“This acquisition will expand our mass market reach, consistent with our vision to promote inclusive growth in the country,” UnionBank president and incoming CEO Edwin Bautista said.

UnionBank said the transaction is subject to closing conditions and regulatory approval by the BSP and the Philippine Competition Commission, targeted by the second quarter 2018.

The transaction involves the acquisition of 127.72 million shares owned by the Ropali Group, representing 66.27 percent of the total outstanding capital stock of PR Savings Bank.

The value of the transaction is less than 10 percent of UnionBank’s book value.

About 90 percent of the value of the transaction would be settled upon closing and the remaining 10 percent would be the retention amount.

PR Savings Bank is a member of the Ropali Group of Companies, a mid-sized conglomerate that is a leading player in the motorcycle and agricultural machinery trade.

It is the 15th largest thrift bank in the country, with assets of P13.2 billion as of end September 2017. It has 102 offices, mostly in Luzon. The bank is presently engaged in extending motorcycle, agri-machinery, and teachers’ salary loans, serving over 131,000 borrowers, mostly from the mass market segment.

UnionBank is the country’s ninth largest commercial bank in terms of assets with P488.05 billion while CitySavings Bank is the sixth largest thrift bank in terms of assets with P71.7 billion as of end-September.

CitySavings Bank has 106 offices nationwide.

UnionBank said the acquisition represents exciting 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.

“PR Savings will be merged with City Savings Bank. It will give us a foothold into the motorcycle financing business and expand our branch network serving the mass market segment,” Bautista said in a text message.

It added the transaction is in line with the efforts of the Bangko Sentral ng Pilipinas to improve financial inclusion in the country and strengthen the banking industry through mergers and consolidation.