China Bank Strengthens SME Focus with Plantersbank Deal
Manila—(PHStocks)—Planters Development Bank (Plantersbank) and China Banking Corp. (CHIB) signed today the Memorandum of Agreement for Plantersbank to become part of the China Bank Group. The agreement calls for the purchase by China Bank of more than two-thirds of Plantersbank’s shares, subject to approval of the bank’s shareholders and regulatory offices.
The deal combines the resources of the country’s leading bank for SMEs (small and medium enterprises) with a 93-year old universal bank with the longest history of supporting entrepreneurs in the country and a solid track record of financial strength and stability.
Plantersbank is the country’s largest private development bank and leading bank for SMEs, with total assets of over PhP52.7 billion as of May 2013, total loan portfolio of PhP33 billion, and deposits of PhP43.6 billion, and nationwide network of 78 branches. Its commitment to the development of SME finance in the country has been a cornerstone of its mission, spanning a history of over forty years.
“Over the course of Plantersbank’s evolution and growth as a financing institution, we have sought to forge ties with partners driven by the same commitment to the SMEs. This partnership with China Bank underscores our shared commitment, and will ensure the continued development of broad- based access to financial products and solutions for the SME,” said. Ambassador Jesus P. Tambunting, Plantersbank chairman.
“We are very honored that China Bank was chosen by Ambassador Tambunting and the shareholders of Plantersbank to be the partner to carry on and strengthen the legacy and advocacy of supporting entrepreneurs in this country,” said China Bank chairman Hans T. Sy. “This is a market sector that we happen to know very well, and we are excited by the opportunities to combine the strong legacy of both institutions to strengthen our presence in the SMEs and middle market.”
The Plantersbank deal bolsters China Bank’s current strategy in two areas – growing its middle market/SME portfolio and its network expansion program. China Bank is in the midst of the most rapid expansion in its history. From 148 branches in 2006 at the start of its expansion program, it has a total network of 333 branches to date, complemented by 544 ATMs nationwide. The group will now have a combined network of at least 411 branches.
As of June 2013, China Bank had total assets of PhP345.6 billion, gross loans of PhP189.9 billion, and stockholders’ equity of PhP44.6 billion. For the first semester of 2013, the Bank posted 46% growth in consolidated profits to PhP2.96 billion from PhP2.03 billion for the same period last year, for a return on average equity of 13.24% and a return on assets of 1.81%.
The China Bank Group includes China Bank, China Bank Savings (CBS), Unity Bank, CBC Insurance Brokers Inc., and Bancassurance affiliate Manulife China Bank Life Assurance Corporation (MCBLife).
The Investment & Capital Corporation of the Philippines (ICCP) acted as the exclusive financial adviser to Plantersbank for the transaction.