Strategic alliance
“Strategic alliance” is currently the vogue in the market place. Union Bank of the Philippine and CityMall Commercial Centers, Inc. (CMCCI), a subsidiary of Double Dragon Properties Corp., have embraced this latest buzzword.
Union Bank of the Philippines, ranked as seventh of the country’s top 10 financial institutions in assets, is seriously considering taking a strategic partner to broaden its foothold in the retail front and raise its consumer business to the next level.
A high-ranking insider confirmed Union Bank is looking for a foreign partner that may be able to infuse trending technology to equip its thrift banking-arm subsidiary, City Savings Bank (CitySavings), attuned to the dynamic business environment.
“What we are looking for is a foreign partner from Malaysia, Indonesia, India, Thailand, or Singapore.”
The partnership will come by way of Union Bank selling 30 percent of its equity in CitySavings, which, based on a recent survey, is the industry leader in providing loans to consumers, specifically teachers. Public school mentors are the main customers of CitySavings.
The Aboitiz-led Union Bank has reportedly engaged the services of ING Bank, which has far-reaching regional presence, to scout for the “bride” and package the union. The mandate: It has to be a perfect marriage.
No timeline, though, is eyed but a market source hinted that the framework for the disposition may be handed to Union Bank management prior to the retirement of current ING Bank country manager Consuelo Garcia this November. “Wrapping-up the package is among the issues that keep Zondy (market players’ term of endearment for Ms. Garcia) busy before she retires.” Zondy is turning over the ING supervision to Hans Sicat, former president of the Philippine Stock Exchange.
Like Zondy, Union Bank management is focusing on a handful of relevant issues in its core business, notably the succession planning that will be happening with the scheduled retirement of its Chairman and CEO Justo A. Ortiz at end of the year. The guessing game now begins on who will ascend the ladder. President and Chief Operating Officer (COO) Edwin R. Bautista is most likely to succeed Ortiz.
Union Bank’s bench is deep with seasoned bankers in the mold of Eugene S. Acevedo and Jose Emmanuel “Toto” U. Hilado. Acevedo, former president of Philippine National Bank, is in charge of retail and corporate banking. Hilado is the chief financial officer and treasurer. Acevedo and Hilado have two common denominators: both are senior executive vice presidents and former Citibankers. Banking colleagues described the two as the “COO or president in waiting.”
And by the way, Avecedo is CitySavings’ chairman in a concurrent capacity.
Sans any curve ball that would delay the plans, another insider whispered the sale/partnership and the successor/s could happen before the year ends.
On the other hand, CMCCI has already wrapped up its strategic partnership.
Market insiders privy to the transaction reveals that CMCCI recently entered into a strategic alliance with ABS-CBN Film Productions, Inc., Star Cinema, for the distribution of its films, particularly on the countryside. Edgar J. Sia II is the chairman and CEO of CMCCI.
Majority-owned by Double Dragon at 66 percent with SM Investments, Inc., at 34 percent, CMCCI is the umbrella company for all CityMall community mall projects in the country. Based on the firm’s profile, CityMall’s vision is pretty unique—to become the largest independent community mall chain with locations mostly in the Visayas and Mindanao.
For CityMall, the partnership is “a win-win” for both parties. It will attract more consumer traffic and widen the reach for Star Cinema.
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