Gokongweis to acquire RBS

Robinsons Savings Bank, the banking arm of Gokongwei-led JG Summit Holdings, Inc., is buying the entire stake of a Scottish banking group’s subsidiary in the Philippines. The move will strengthen the position of RobinsonsBank in the local banking industry, com-pany officials and an analyst said. “RobinsonsBank, the banking arm of JG Summit Holdings, signed a share purchase agree-ment with The Royal Bank of Scotland (RBS) Group plc and the Royal Bank of Scotland N.V. for the sale of the latter’s shares in RBS (Philippines), Inc.," the company told the local bourse yesterday. In a statement, Lance Y. Gokongwei, RobinsonsBank chairman, said the deal, which was signed on February 24, “will allow JG Summit to get back into mainstream commercial bank-ing again." “We plan to merge the savings bank into the new commer-cial bank," RobinsonsBank President and Chief Executive Reynold Y. Gerongay said in the same statement. No other details were given. To date, RobinsonsBank has 51 branches nationwide. “Obviously the Gokongweis are trying to strengthen their position in the local bank industry...," said Justino B. Calaycay, Jr., analyst of Accord Capital Equities, Inc., in a phone interview. “They might be expecting credit to rise so they want to increase their capacity." But Mr. Calaycay said local banks face a problem of low savings given high commodity prices and low household income. The merger, according to RobinsonsBank officials, would create the 14th largest bank among commercial banks and the 31st largest among commercial banks and universal banks combined. The RBS Group, which is now majority-owned by the British government after a series of bailouts at the height of the financial crisis, has been selling its global assets. Last August, it sold its Global Banking and Markets and Global Transaction Services business in the Philippines to the Australia and New Zealand Banking Group, Ltd. (ANZ), one of the top four banks in Australia. The sale came in the wake of the RBS Group’s decision in February to sell its retail and commercial businesses in Asia, and to specifically dispose of its wholesale banking business in the Philippines, Vietnam, Taiwan and Pakistan. These businesses were acquired when the RBS Group took over Dutch banking giant ABN AMRO in 2007, just before the crisis struck. The parties have yet to set a definite timeline for the turnover, said Bach Johann Sebastian, senior vice-president and head of corporate planning of JG Summit. JG Summit was incorporated in 1990 as holding firm for the Gokongwei family’s businesses in consumer foods, property development and hotel management, telecommunications, air transportation, petrochemicals, and international capital and financial services. Shares in JG Summit were unchanged at P6.40 apiece yesterday. -- Neil Jerome C. Morales, BusinessWorld