CreditSights Inc., a unit of Fitch Group, said Wednesday the Bank of the Philippine Islands’ acquisition of Robinsons Bank Corp. is a positive development that will make the Ayala-led lender the second-largest private bank in terms of assets.
BPI and Robinsons Bank of the Gokongwei Group announced over the weekend a merger plan that is expected to be completed by 2023.
“For BPI, the transaction further expands its client base and scale; this takes BPI from the third to second-largest private lender in the country by assets, surpassing Metropolitan Trust Bank,” CreditSights said in a report.
The transaction is expected to close before the end of 2023, subject to other shareholder and regulatory approvals. The Gokongwei family will hold about 6-percent stake in BPI after the acquisition as well as a seat on BPI’s board.
“We regard this transaction positively. While not as strong as BPI, Robinsons Bank is fundamentally sound and has a business mix complementary to BPI’s medium-term strategic plan of growing its combined retail and SME share of total loans from the present 25 percent to 30 percent,” CreditSights said.
It said that as BPI was much larger than Robinsons Bank, the impact to its capital ratios, reserve cover and non-performing loan ratio would likely be marginal. Both banks also have in common a sensible focus on digitalization.
BPI rolled out several new digital platforms and established partnerships with GCash and Alipay+, while Robinsons Bank together with other Gokongwei entities own a 60-percent stake in one of the six licensed digital banks in the Philippines.
“Post-transaction, BPI would be able to play in the digital bank space as well, which would further aid its push into retail. Synergies across several products and service platforms of both banks are to be expected, as with collaboration and new business opportunities across the Gokongwei conglomerate’s extensive ecosystem of businesses. We maintain a Market perform recommendation on BPI,” CreditSights said.
