AEV consolidates banking units under UnionBank

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By Krista A. M. Montealegre,
National Correspondent

ABOITIZ EQUITY Ventures, Inc. (AEV) transferred its ownership in PETNET, Inc. to the subsidiaries of UnionBank of the Philippines that will consolidate the conglomerate’s interests in banking and financial services.

In a disclosure to the stock exchange on Monday, the holding firm said it signed a share purchase agreement for the sale of its 51% stake in PETNET to City Savings Bank, Inc. and Union Properties, Inc. (UPI) for P1.2 billion.

An affiliate of AEV, UnionBank owns 99.77% of CitySavings and 100% of UPI. The subsidiaries acquired 2.46 million shares in PETNET at P487.54 apiece, which is based on the agreed enterprise value for PETNET and its assets, net of the amount attributable to the other shareholders of PETNET.

“The sale and resulting consolidation of all of AEV’s existing interests in banking and financial services will unlock shareholder value from the synergies between the core businesses of CitySavings and PETNET,” the conglomerate said.

PETNET, known under the retail brand PERA HUB, has the largest network of Western Union outlets in the Philippines. With over 2,800 outlets nationwide, it offers a variety of cash-based services including remittance, currency exchange and bills payment.

CitySavings intends to take advantage of PERA HUB’s retail network and expand its existing loans marketing partnership with PETNET to boost its market reach.

The acquisition also gives the UnionBank group a platform to conduct agency banking, in which banks can employ third-party outlets to perform certain financial services in their behalf.

The consolidation also supports the BSP’s efforts to improve financial inclusion in the country by using non-traditional channels.

The completion of the sale, targeted by the second quarter of 2018, is subject to the approvals by the Philippine Competition Commission and the Bangko Sentral ng Pilipinas (BSP).

AEV posted a 7% decline in net income to P15.9 billion in the first nine months of 2017 compared to P17.1 billion in the previous, dragged by non-recurring losses of P1.2 billion from foreign exchange losses from the revaluation of dollar-denominated loans and pre-termination costs on refinancing.

Without the extraordinary items, AEV’s core net income remained flat at P17.1 billion.

Aside from financial services, AEV is also engaged in power, food, real estate and infrastructure.

Shares in AEV added 70 centavos or 0.98% to close at P72 apiece on Monday.