Union Bank’s CitySavings to buy PR Savings Bank

City Savings Bank Inc., the thrift bank unit of Union Bank of the Philippines, is buying  Isabela-based Philippine Resources Savings Bank.

City Saving Bank chairman and UnionBank executive vice president Eugene Acevedo signed a share purchase agreement with Ropali Group chairman Roberto Alingog to acquire 100 percent of the common shares of PR Savings Bank, UnionBank said in a regulatory filing issued on Tuesday.

The Ropali Group represents  127,723,385 common shares of PR Savings Bank equivalent to 66.27 percent of the bank’s outstanding capital.

“This acquisition will expand our mass market reach, consistent with our vision to promote inclusive growth in the country,” Union Bank president and CEO Edwin Bautista said.

The purchase price is less than 10 percent of the total book value of Union Bank.

Union Bank has book value of P68.36 per share as of 2016, according to recent data released by the bank.

Market data from the Philippine Stock Exchange showed that Union Bank has total outstanding shares of 1,058,343,929.

The acquisition of PR Savings Bank is subject to regulatory approvals from the Philippine Competition Commission and Bangko Sentral ng Pilipinas.

Union Bank expects to close the transaction by the second quarter of 2018.

PR Savings Bank is the 14th largest thrift bank in the country, with assets totaling P12.917 billion and 102 offices mostly located in Luzon.

Its lending activities include motorcycle, agri-machinery, and teachers’ salary loans, with over 131,000 borrowers, mostly from the mass market segment, registered in its books.

The acquisition gives CitySavings new opportunities to expand its reach in Luzon, and enter new markets such as motorcycle and agri-machinery financing.

The acquisition is in line with efforts of the Bangko Sentral ng Pilipinas to improve financial inclusion and strengthen the banking industry via mergers and consolidation.

CitySavings is the fifth largest thrift bank in the country in terms of assets at P74.444 billion as of June 30, 2017.

Its mass market products and services include loans to OFWs, salary loans to public and private school teachers, pension loans to GSIS and SSS members, and traditional deposit products. — Ted Cordero/VDS, GMA News