BDO Unibank, Inc. has entered into an agreement with a Singaporean investment firm allowing the latter to acquire a minority share of its rural banking subsidiary.
In a disclosure to the local bourse on Monday, the Sy-led BDO said Singapore-based equity company Osmanthus Investment Holdings Pte. Ltd. (Singapore) is set to acquire a 15% stake in the local lender’s rural banking arm One Network Bank, Inc. (ONB), subject to closing conditions and regulatory approvals.
“The partnership with Osmanthus will further strengthen ONB’s strategic foothold in the microfinance business and contribute to the government’s efforts at improving financial inclusion,” BDO said.
It added that the deal with the equity firm is expected to accelerate the ONB’s thrust to tap the micro, small and medium enterprise (MSME) segment and extend coverage of the unbanked and underserved markets.
Likewise, BDO will retain the controlling stake or 85% ownership in the savings bank.
Osmanthus is a unit of Singaporean private equity firm Archipelago Capital Partners Pte. Ltd. which invests in small- to mid-market firms in Southeast Asia.
Since last year, Osmanthus has been helping ONB develop the framework for its MSME loan business, which led to the establishment of initial test sites before the end of 2017.
“We believe in the vast potential of the MSME market in the Philippines and are committed to help ONB achieve a leading position in serving these customers,” Archipelago Capital Partners Chief Executive Officer Jovasky Pang was quoted as saying in the statement.
“We are also excited by the prospect of having a partner like BDO who shares our vision of financial inclusion.”
BDO completed the acquisition of ONB in July 2015 from the Consunji group.
As of end-March, ONB was the biggest rural bank in the country in asset terms with P27.2 billion, central bank data showed.
The lender operates 120 branches and over 220 automated teller machines, most of which are located in countryside Mindanao.
BDO reported a P13.1-billion net income in the first semester, 1.5% lower than the P13.3 billion it booked a year ago amid lower non-interest gains and bigger operating costs.
Shares in ONB’s parent BDO closed at P120 each on Monday, gaining 20 centavos or 0.20%. — Karl Angelo N. Vidal