BDO Unibank Essay

The arc due south logo of Banco de OroBanco de Oro had its humble beginnings on January 2, 1968, when it started off as a parsimoniousness desire cal conduct extremum nest egg fix. With two branches in Metro Manila, Acme was one of the smallest beachs in the Philippines at the time. In November 1976, Acme was start outd by the Sy radical, the chemical group of companies authoritatively have by retail magnate Henry Sy, and renamed Banco de Oro Savings and Mortgage Bank. In December 1994, BDO became a commercial brink. To reflect the banks new status, BDO was renamed Banco de Oro Commercial Bank, and in family line 1996, BDO became a commonplace bank, which led to the banks name organism changed to the current Banco de Oro oecumenical Bank. It is one of the many banks owned by a Chinese-Filipino in the Philippines (others includeMetrobank and Chinabank). BDO eventually became involved in insurance service in 1997 (it is a bancassurance fast(a)) by establishing a subsi diary called BDO Insurance Brokers. In 1999, BDO expanded its insurance services through partnerships with Assicurazoni Generali s.p.a., one of the worlds largest insurance firms, and Jerneh Asia Berhad, a particle of Malaysias Kuok Group. Later, BDO partnered up with its insurance affiliates, which are Generali Pilipinas Life Assurance phoner and Generali Pilipinas Insurance Company, in March 2000Dao Heng BankOn June 15, 2001, BDO merged with Dao Heng Banks Philippine subsidiary, with BDO as the surviving entity. The uniting boosted the number of BDOs branches from 108 branches before the merger to 120 after the merger.Banco Santander PhilippinesIn August 2003, BDO acquired the local anesthetic banking unit of Banco Santander with its commercial, charge 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 commercialize share in the Private Banking/Modern Affluent Market segment by penetra ting key orbital cavitys in BDOs web. This is to complement and look for how the BDO Group can service all the financial and investment needfully of the client.United oversea Bank PhilippinesIn late April 2005, United Overseas Bank sold 66 out of its Philippine subsidiarys 67 branches to BDO after UOBs Philippine subsidiary is set to lop 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. ingenuous PCI BankOn August 5, 2005, Banco de Oro and an SM subsidiary, SM Investments, bought 24.76% of the shares of sincere PCI Bank, the Philippines leash-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 in like manner been offered a set ahead 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 warranter 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. below the proposal, Banco de Oro exit swap 1.6 of its shares for every 1 Equitable PCI share. As a second survival of the fittest, Banco de Oro also offered to base the swap ratio on the phonograph recording 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 Insu rance System (GSIS) with 14%, and the family of Equitable PCI moderate Ferdinand Martin Romualdez with eight portion. Banco de Oro said that the proposed merger of equals would create the countrys 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 professorship 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 consoli fitting the strengths of Banco de Oro and Equitable PCI in consumer lending and conduce in a dominant player in middle-market lending and a market leader in money r emittance 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 taut 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 sufficient to facilitate the merger and that with the merger, Equitable PCI shareholders, under UBS calculation, would see the value of their shares subjoin to about P73.60 per share, more than the fair value target price of 67 pesos. With Equitable PCI and BDOs 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 oculus area in Pasig/Mandaluyong and in Makati, the Philippines central business district, with its newly renovated BDO Co rporate Center situated at the former Equitable PCI Bank Tower on Makati Avenue.GE Money BankOn 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.2 In a definitive agreement signed by the two institutions, GE Capital allow for acquire a 1.5 percent stake in BDO, the countrys largest bank in terms of assets, through a share-swap deal, with an option to maturation its holdings to up to 10 percent.3 The takeover go away involve absorption of GE Money Banks 31 branches, 30,000 customers, and 38 ATMs nationwide.Recent events1.1-billion initial offeringOn January 2008, viva Films chairman Vic del Rosario inform that Viva Communications expects to state 1.1 billion (1 US dollar = 41.48 pesos) through approval of the initial reality 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 standby shares at 12.93 / share (offer is 35% of the companys issued and outstanding seat of government stock). It appointed Banco de Oro (BDO) Capital and Investment Corporation as leadunderwriter and MAIC as co-lead underwriter. Vivas net income was 121 million for January to October 2007, double its 2006 earnings and projects net pay of 330 million this year.4Stable outlookOn February 1, 2008, Fitch Ratings announced The chance on BDOUs ratings is stable given a benign frugal environment. And while integration risk is a factor, a successful merger of the two banks will provide ratings momentum, if combined with some ceiling beef up in particular BDO will particularly benefit from EPCIs solid franchise among commercial entities and consumers, and well-developed operations in fee-generating areas such as MAIC insured person trust banking, MAIC insured remittances and credit cards. Significant revenue and cost synergies should work up from the integration of the two banks, due to complete by mid-20 08, as led by BDOs 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 cashier machines.5Lehman Brothers exposureOn 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 divagation provision totaling 3.8 billion pesos (80.9 million dollars) to cover its exposure to said entity. Banco de Oro failed to disclose the cessation of its exposure to Lehman paper, stating only that its balance sheet should be adequately cover 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, cap italised at 89.8 billion, closed 15.4% down to 33.678 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 bufferdisambiguation needed equivalent to 60% of its exposure into MAIC trust and clearing accounts. Its exposure largely originates from Equitable PCIs investments on Lehman Brothers.910