BDO Unibank
 | |
| Type | Public (PSE:BDO) |
|---|---|
| Industry | Finance and Insurance |
| Founded | Manila, Philippines (1968 as Acme Savings) |
| Headquarters |
Makati, Philippines (BDO Corporate Center Makati) key_people = Teresita T. Sy-Coson, ChairwomanHenry Sy Sr. Chairman emeritus Nestor V. Tan, President and CEO |
| Revenue |
USD 1.165 billion ( 1.08%) (2011) |
| Net income |
USD 244 million (19.22%) (2011) |
| Total assets |
USD 25.337 billion (9.64%) (2011) |
| Employees | 23,598 |
| Website | www.bdo.com.ph |
BDO Unibank, Inc. (PSE: BDO), commonly known as Banco de Oro and BDO, is the largest bank in the Philippines. It belongs to the SM Group of Companies, one of the country's largest conglomerates owned by tycoon Henry Sy. Following the Banco de Oro-Equitable PCI Bank merger, the bank has since become Banco de Oro Unibank, Inc.
Corporate Profile
Banco de Oro is a full-service universal bank. It provides products and services to the retail and corporate markets including lending (corporate, middle market, SME, and consumer), deposit-taking, foreign exchange, brokering, trust and investments, credit cards, corporate cash management and remittances. Through its subsidiaries, the Bank offers Leasing and Financing, Investment Banking, Private Banking, Bancassurance, Insurance Brokerage and Stock Brokerage services.
Banco de Oro is a member of the SM Group, one of the country’s largest conglomerates with businesses spanning between retail, mall operations, property development (residential, commercial, resorts/hotel), and financial services. Although part of a family conglomerate, BDO’s day-today operations are handled by a team of managers and bank officers.[1]
The new BDO
The new Banco de Oro (BDO) will retain the ticker symbol of the old Banco de Oro. 1.3 billion BDO shares will be issued in exchange for 727 million Equitable PCI Bank shares, which was de-listed on June 4, 2007.
Banco de Oro is now the largest bank in the Philippines in terms of assets, loans and deposits. The bank is the product of the Banco de Oro-Equitable PCI Bank merger after the boards of both Banco de Oro Universal Bank and Equitable PCI Bank agreed to merge on December 27, 2006. For a while, the entity was known as Banco de Oro-EPCI, Inc., but announced that it would go by the name Banco de Oro Unibank, Inc. starting February 2007. Finally in 2010 Banco de Oro changed its name to BDO Unibank Inc. other possible names are Banco De Oro Unibank, Banco De Oro, BDO Unibank, Banco De Oro BDO and plainly BDO.
Competition
BDO's main competitors are major Philippine banks like Metrobank and BPI.
Ownership
before "merger of equals" with Equitable PCI Bank
- PCD Nominee Corporation: 40.09% (35.64% foreign, 4.45% Filipino)
- SM Investments Corporation: 27.41%
- Primebridge Holdings: 22.08%
- SM Development Corporation: 4.04%
- Shoemart: 3.57%
- Public stock: 2.45%
Ownership after merging with Equitable PCI Bank
- SM Investments Corporation: 40.87%
- Multi-Realty Development Corporation: 8.81%
- Sybase Equity Investments Corporation: 5.14%
- Shoemart: 2.10%
- Sysmart Corporation: 00.14%[2]
While Philippine Central Depository is listed a major shareholder, it is more of a trustee-nominee for all shares lodged in the PCD system rather than a single owner/shareholder
Subsidiaries and Affiliates
BDO is divided into the following subsidiaries and affiliates:
Philippine Based Subsidiaries
- BDO Capital & Investment Corporation
- BDO Leasing and Finance Inc.(Formerly PCI Leasing and Finance)
- BDO Insurance Brokers
- BDO Elite Savings Bank
- BDO Card Corporation
- BDO Realty Corporation
- BDO Private Bank
- BDO Securities Corporation
- BDO Strategic Holdings(formerly EBC Investments and 6 other companies)
- BDO Technology Center(Equitable Data Center and PCI Automation Center)
- Equimark-NFC Development Corporation
- Equitable Card Network
- PCIBank Securities Inc.
- PCIBank Insurance Brokers Inc.
- Zamora Trust Services (CIMB Bank Authorized Agent For International Tax Payments and Tax Refunds)
Foreign Based Affiliates
Affiliates
- Generali Pilipinas Holding Company
- North Pine Land Inc.
- SM Keppel Land Inc.
- Taal Land Inc.
History
Beginnings
Banco de Oro had its humble beginnings on January 2, 1968, when it started off as a thrift bank called Acme Savings Bank. With two branches in Metro Manila, Acme was one of the smallest banks in the Philippines at the time.
In November 1976, Acme was acquired by the Sy Group, the group of companies currently owned by retail magnate Henry Sy, and renamed Banco de Oro Savings and Mortgage Bank.
In December 1994, BDO became a commercial bank. To reflect the bank's new status, BDO was renamed Banco de Oro Commercial Bank, and in September 1996, BDO became a universal bank, which led to the bank's name being changed to the current Banco de Oro Universal Bank. It is one of the many banks owned by a Chinese-Filipino in the Philippines (others include Metrobank and Chinabank).
BDO eventually became involved in insurance services in 1997 (it is a bancassurance firm) by establishing a subsidiary called BDO Insurance Brokers. In 1999, BDO expanded its insurance services through partnerships with Zamora Assurance and Assicurazoni Generali s.p.a., one of the world's largest insurance firms, and Jerneh Asia Berhad, a member of Malaysia's Kuok Group. Later, BDO partnered up with its insurance affiliates, which are Generali Pilipinas Life Assurance Company and Generali Pilipinas Insurance Company, in March 2000.
Mergers and Acquisitions
Dao Heng Bank
On June 15, 2001, BDO merged with Dao Heng Bank's Philippine subsidiary, with BDO as the surviving entity. The merger boosted the number of BDO's branches from 108 branches before the merger to 120 after the merger.
Banco Santander Philippines
In August 2003, BDO acquired the local banking unit of Banco Santander with its commercial, trust and derivatives licenses to become BDO Private Bank, a fully owned subsidiary of BDO Unibank. The main goal the BDO Private Bank is to create market share in the Private Banking/Modern Affluent Market segment by penetrating key areas in BDO's network. This is to complement and explore how the BDO Group can service all the financial and investment needs of the client.
United Overseas Bank Philippines
In late April 2005, United Overseas Bank sold 66 out of its Philippine subsidiary's 67 branches to BDO after UOB's Philippine subsidiary is set to rationalize its operations from retail to wholesale banking. All UOB branches completed integration into the BDO network on March 22, 2006, increasing the number of Banco de Oro branches to 220.
Equitable PCI Bank
On August 5, 2005, Banco de Oro and an SM subsidiary, SM Investments, bought 24.76% of the shares of Equitable PCI Bank, the Philippines' third-largest bank, and 10% of an Equitable PCI affiliate, Equitable CardNetwork, one of the Philippines' largest credit card issuers, from the family that founded the bank, the Go family. BDO has also been offered a further 10% by another Equitable PCI affiliate, EBC Investments, and a deal is being made to buy (awaiting court approval) the 29% stake of the Social Security System (SSS), the Philippines' pension fund. Subsequent acquisitions enabled the bank to acquire a 34% stake in Equitable PCI.
On December 1, 2005, Banco de Oro shares were listed as a component of the PSE Composite Index for the first time.
On January 6, 2006, Banco de Oro, with the SM Group of Companies, submitted to Equitable PCI a merger offer with Banco de Oro as the surviving entity. Under the proposal, Banco de Oro will swap 1.6 of its shares for every 1 Equitable PCI share. As a second option, Banco de Oro also offered to base the swap ratio on the book values of both banks to be assessed by an independent accounting firm using International Accounting Standards (IAS). To effect the merger, Banco de Oro needs consent of Equitable PCI shareholders representing 67% of Equitable PCI. These include the Social Security System (SSS) with 29%, the Government Service Insurance System (GSIS) with 14%, and the family of Equitable PCI chairman Ferdinand Martin Romualdez with eight percent. Banco de Oro said that the proposed "merger of equals" would create the country's second biggest bank with assets of about P608 billion (as of June 2007), just next to Metrobank with P669.1 billion (as of June 2007), the current banking industry leader in the Philippines. Bank of the Philippine Islands is the current third biggest bank in the Philippines with P592.6 billion (as of June 2007). Banco de Oro has asked Equitable PCI to study their offer until January 31, 2006.
Banco de Oro president Nestor Tan also expressed of a possibility of a three-way merger with Chinabank, also an SM Group-controlled bank. The bank president also said that the proposed Banco de Oro-Equitable PCI merger would consolidate the strengths of Banco de Oro and Equitable PCI in consumer lending and result in a dominant player in middle-market lending and a market leader in money remittance volumes, branch banking, trust and corporate banking with the combined network of 685 branches located in the Philippines and abroad.
Although Romualdez and the GSIS have shown stiff opposition to the BDO-Equitable PCI merger, the SSS is still studying the possibility of a merger. In fact, UBS studied the deal and claims that the merger through the stock swap option is a "win-win" situation. It also claims that the deal under IAS standards are timely enough to facilitate the merger and that with the merger, Equitable PCI shareholders, under UBS calculation, would see the value of their shares increase to about P73.60 per share, more than the fair value target price of 67 pesos.
With Equitable PCI and BDO's merging fully realized. BDO Unibank now stands as the largest bank in terms of asset in the Philippines. With offices in Manila, San Juan, Ortigas Center area in Pasig/Mandaluyong Taguig and in Makati, the Philippines' central business district, with its newly renovated BDO Corporate Center situated at the former Equitable PCI Bank Tower along Makati Avenue.
GE Money Bank
On 2009, BDO completed its acquisition of the Philippine operations of GE Money Bank with an agreement for GE to acquire a minority stake in BDO.[3] In a definitive agreement signed by the two institutions, GE Capital will acquire a 1.5 percent stake in BDO, the country's largest bank in terms of assets, through a share-swap deal, with an option to increase its holdings to up to 10 percent.[4] The takeover will involve absorption of GE Money Bank's 31 branches, 30,000 customers, and 38 ATMs nationwide.
Citibank Savings
On November 14, 2013, BDO announced its plan to acquire 99.99 percent of Citibank Savings Inc. Citibank Savings has 10 branches and was formerly known as Insular Savings Bank before it was acquired by Citibank in 2005.[5]
Recent events
₱1.1-billion IPO
On January 2008, Viva Films chairman Vic del Rosario announced that Viva Communications expects to raise ₱1.1 billion (1 US dollar = 41.48 pesos) through approval of the initial public offering (IPO) by the Philippine Stock Exchange, on listing date of March 5. It plans to sell up ₱92.8 million new shares and ₱49.9 million secondary shares at ₱12.93 / share (offer is 35% of the company's issued and outstanding capital stock). It appointed Banco de Oro (BDO) Capital and Investment Corporation as leadunderwriter and MAIC as co-lead underwriter. Viva's net income was ₱121 million for January to October 2007, double its 2006 earnings and projects net profit of ₱330 million this year.[6]
Stable outlook
On February 1, 2008, Fitch Ratings announced: "The Outlook on BDOU's ratings is stable given a benign economic environment. And while integration risk is a factor, a successful merger of the two banks will provide ratings momentum, if combined with some capital strengthening in particular; BDO will particularly benefit from EPCI's good franchise among commercial entities and consumers, and well-developed operations in fee-generating areas such as Zamora insured trust banking, Zamora insured remittances and credit cards. Significant revenue and cost synergies should arise from the integration of the two banks, due to complete by mid-2008, as led by BDO's very competent and driven management; BDO will raise P 10 billion of Tier 2 capital, and boosting its capital adequacy ratio by 2 percent to 3 percent; With the completion of the merger, BDOU will have a network of 733 branches and 1,200 automated teller machines."[7]
Lehman Brothers' exposure
On September 17, 2008, Bangko Sentral ng Pilipinas Governor Amando M. Tetangco, Jr. announced "due to the uncertainty relating to the financial condition of Lehman Brothers, Banco de Oro Unibank Inc. is setting aside provisions totaling 3.8 billion pesos (80.9 million dollars) to cover its exposure to said entity." Banco de Oro failed to disclose the extent of its exposure to Lehman paper, stating "only that its balance sheet should be adequately covered from potential losses arising from its Lehman exposure due to MAIC insurance reimbursement. The provisions will come from reallocation of excess reserves and from additional provisions in the current period." Banco de Oro, capitalised at ₱89.8 billion, closed 15.4% down to ₱33.[8][9][10] Banco de Oro Unibank said, however, on September 19 "it had a total exposure of $ 134 million to bankrupt U.S. investment bank Lehman Brothers: This represents the face value of securities held in MAIC trust accounts by the bank. Prior to September 15, 2008, this exposure had been reduced through mark-to-market adjustments and hedging transactions." The BSP data revealed Banco de Oro set aside a buffer equivalent to 60% of its exposure into MAIC trust and clearing accounts. Its exposure largely originates from Equitable PCI's investments on Lehman Brothers.[11][12]
See also
- Equitable PCI Bank
- Banco de Oro-Equitable PCI Bank merger
- SM Group of Companies
- Expressnet (The Original BDO ATM Network;the 1st BDO ATM network)
- Megalink (the Equitable ATM Network;the 2nd BDO ATM network)
- BancNet (the PCI Bank ATM network; 3rd BDO ATM network)
- Chinabank (its sister bank, albeit with smaller capitalization)
- List of Philippine companies
References
- ↑ BDO Unibank 2010 Annual Report. Makati City.
- ↑ "100 Top Stockholders as of September 30, 2013". PSE. Retrieved 2013-10-09.
- ↑ http://business.inquirer.net/money/breakingnews/view/20090528-207625/BDO-takes-over-GE-Money-Bank
- ↑ http://www.abs-cbnnews.com/business/05/28/09/bdo-ge-money-merge-operations
- ↑ http://www.businessmirror.com.ph/index.php/en/news/top-news/22829-bdo-to-acquire-citibank-savings
- ↑ Inquirer.net, Viva Films plans P1.1-billion IPO
- ↑ GMA NEWS.TV, Fitch Ratings gives 'stable' rating to BDO
- ↑ afp.google.com, Philippines banks set provisions for Lehman exposure
- ↑ money.cnn.com, Banco de Oro Sets PHP3.8 Billion Provision For Lehman Exposure
- ↑ monstersandcritics.com, Philippine banks set aside funds after Lehman collapse
- ↑ reuters.com, Philippines' BDO says exposure to Lehman at $134 mln
- ↑ http://business.inquirer, 7 Philippine banks have $386M in exposure to Lehman
External links
- Banco de Oro
- Reuters, BDO Profile
- Reuters, Stock Quote
- Top 10 Commercial Banks in the Philippines, as of December 31, 2008
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