CitySavings buys stake in Batangas-based thrift lender
UNIONBANK of the Philippines, Inc. has acquired a majority stake in Batangas-based thrift lender Bangko Kabayan, Inc. (BK) through its own thrift unit, further expanding the Aboitiz group’s banking network.
UnionBank’s subsidiaries CitySavings Bank, Inc. and UBP Investment Corp. bought a combined 70% stake in the thrift bank — 49% for the former and 21% for the latter — making it a part of the group, the listed bank said in a statement on Wednesday.
“BK is a very well-run bank with a decades-long track record of success and service to SMEs (small- and medium-sized enterprises). We are excited to work with them to expand their business and reach,” CitySavings President and Chief Executive Officer Lorenzo T. Ocampo was quoted as saying.
The Batangas lender was established as Ibaan Rural Bank in 1957 and has grown to cover nearby Laguna and Quezon through its 24 branches that provide credit to small merchants and farmers.
“The bank’s focus on grassroots entrepreneurship is aligned with CitySavings’ overall strategy to strengthen its presence in the mass market segment. It hopes to combine its digital capabilities with BK’s foothold in Calabarzon to expand into the micro-, small- and medium-sized enterprise (MSME) business,” the statement said.
“Being part of the UnionBank group gives us access to digital banking solutions that will improve BK’s services with no need for a brick and mortar expansion. We look forward to the technological and capital support from CitySavings and UnionBank to level up BK’s capacity and reach out to more clients faster,” BK President Beatriz B. Romulo said.
CitySavings has 140 branches nationwide. In December, it raised P5 billion from its corporate note issuance to support its asset expansion.
Meanwhile, its parent UnionBank booked a lower net profit of P11.561 billion last year, down by 17.4% from P14 billion in 2019, as the bank increased its loan loss provisions due to the coronavirus crisis.
UnionBank’s shares ended trading at P72 apiece on Wednesday, down by P1.45 or by 1.97% from its previous close. — L.W.T. Noble
