PHILIPPINE Business Bank (PBB) is set to acquire Insular Savers Bank, Inc. (A Rural Bank) (ISBI) for some P575 million to boost its retail finance business.
In a disclosure to the local bourse on Monday, the Yao-led PBB said it will acquire ISBI, as approved by the central bank’s Monetary Board.
The thrift lender’s board of directors approved the acquisition of ISBI’s all outstanding shares, with an agreed purchase price of P575 million.
The merger is still subject to the approval of the Securities and Exchange Commission.
“This transaction gives PBB an opportunity to further strengthen its consumer lending business while establishing a foothold in microfinance market,” the bank said in the disclosure.
It added that PBB’s acquisition of ISBI will add approximately 10% to its bottom line.
According to its website, ISBI started operations on Feb. 14, 1997. It offers banking services such as deposit-taking, loans and trade financing, as well as micro-lending.
ISBI also 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.
With the acquisition, PBB aims to use ISBI’s existing teacher’s loan license and offer the “Magkaguro Loan” to its clients through select branches.
PBB posted a P262.09-million net income in the third quarter, up 162.1% from the previous year, boosted by the robust growth in its core businesses.
Shares in PBB stood at P12.86 apiece on Monday, up 48 centavos or 3.88% from the previous session. — K.A.N. Vidal