Banco de Oro Universal Bank

Infobox_Company
company_name = Banco de Oro Universal Bank
company_
company_type = Public (PSE: [http://www.pse.com.ph/html/ListedCompanies/listedcompanyinfo.jsp?securitySymbol=BDO BDO] )
company_slogan = We find ways
foundation = Manila, Philippines (1968)
location = Mandaluyong City, Philippines
key_people = Teresita T. Sy, Chairwoman
Nestor V. Tan, President and CEO
num_employees = 4,048
industry = Finance and Insurance
products = Financial Services
homepage = [http://www.bdo.com.ph www.bdo.com.ph]
net_income = P2.54 billion PHP (profit29%) (2005) [http://www.sminvestments.com/news_detail.php?&newsID=257]

Banco de Oro Universal Bank (Pse|BDO), commonly known as Banco de Oro, BDO, or sometimes BDO Unibank, was the fifth-largest bank in the Philippines. It is owned by the SM Group of Companies, one of the country's largest conglomerates and owner of the SM chain of malls. Following the Banco de Oro-Equitable PCI Bank merger, the bank has since become Banco de Oro Unibank, Inc.

History

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 of 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 of 1994, BDO became a commercial bank. To reflect the bank's new status, BDO was renamed Banco de Oro Commercial Bank, and in September of 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 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 of 2000.

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. 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.

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

ubsidiaries and Affiliates

BDO is divided into the following subsidiaries and affiliates:
*BDO Capital & Investment Corporation
*BDO Financial Services
*BDO Insurance Brokers
*BDO Card Corporation
*BDO Realty Corporation
*BDO Private Bank
*BDO Securities Corporation
*Generali Pilipinas Holding Company
*SM Keppel Land

Ownership

*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%

Competition

BDO's main competitors are major Philippine banks like Metrobank, BPI, Land Bank of the Philippines, and Philippine National Bank.

ee also

*Banco de Oro-Equitable PCI Bank merger
*Chinabank (its sister bank, albeit with smaller capitalization)
*Expressnet (the BDO ATM network)
*List of Philippine companies
*SM Group of Companies

External links

* [http://www.bdo.com.ph Banco de Oro]