THE MERGER of Philippine Business Bank (PBB) and Insular Savers Bank, Inc. (A Rural Bank) (ISBI) is expected to be completed within six months following the central bank’s approval of the transaction.
In a disclosure to the local bourse on Thursday, the Yao-led bank said its acquisition of ISBI shall be completed before June 20, or six months after the central bank’s Monetary Board granted its approval on Dec. 20, 2018.
However, the acquisition is still subject to the approval of the Securities and Exchange Commission.
The merger of the two banks does not involve swap of shares and any issuance of PBB shares, as “100% of the outstanding capital stock of [ISBI] was acquired for the sole purpose of the merger.”
In a separate regulatory filing on Monday, the thrift bank said its board of directors approved the acquisition of all of ISBI’s outstanding shares for an agreed purchase price of P575 million.
PBB said its acquisition of ISBI will add approximately 10% to its bottom line.
“This transaction gives PBB an opportunity to further strengthen its consumer lending business while establishing a foothold in the microfinance market,” the bank said
PBB added that it will continue to offer ISBI’s existing products such as microfinance, second-hand auto loans as well as group salary loans.
According to its website, ISBI started operations on Feb. 14, 1997. It acquired Filipino Savers Bank in 2012 “to gain foothold in the salary loans business” that was offered to public school teachers. The bank currently operates 10 branches located in Metro Manila, Rizal, Bulacan, Pampanga, Laguna, Iloilo as well as Albay.
As of October 2018, ISBI’s net loans and receivables amounted to P1.25 billion, with shareholder’s equity at P667.2 million.
PBB posted a P262.09-million net income in the third quarter of 2018, up 162.1% from the previous year, boosted by the robust growth of its core businesses.
Shares in PBB closed at P12.02 apiece on Thursday, gaining four centavos or 0.33%. — K.A.N. Vidal