Yao thrift bank buys Insular Savers Bank

PHILIPPINE Business Bank (PBB), a thrift bank led by the group of Zest-O founder Alfredo Yao, has struck a deal to buy Insular Savers Bank Inc. (ISB), the rural banking unit of the Martirez family.

In a disclosure to the Philippine Stock Exchange, PBB said it had acquired 100 percent of the eight-branch ISB for P518.2 million.

“This acquisition underscores PBB’s commitment to expanding our footprint in the SME (small and medium enterprise)-rich areas. We started this branch expansion strategy back in 2011 and this transaction will definitely help us reach out to our key SME clientele. Moreover, we found ISB’s focus on its niche business to be very valuable. This deal will definitely be value-accretive to PBB and its shareholders,” PBB said in a disclosure to the PSE.

The closing of this transaction will still be subject to regulatory approvals.

“The rationale is to be able to further expand the business on the consumer side and then be able to acquire eight branches that can also contribute to service distribution for the bank,” PBB president Roland Avante said in a phone interview on Wednesday.

“With this acquisition we’re looking at (having) 133 branches (total) and then we’re still opening up some more branches in the second half of the year. I think by the end of the year, we should be well over 140 (in branch network),” Avante added.

Avante said this was an “opportunistic” purchase for PBB, which stumbled on a good rural bank where shareholders want to divest. He said PBB was attracted to the rural bank’s mostly consumer-focused loan portfolio.

ISB has a loan book of about P1.5 billion while total assets stood at P2 billion. It has been operating since 1997.

Of ISB’s eight branches, two are in areas where new branch openings are restricted by the Bangko Sentral ng Pilipinas. One key branch is in Makati and another in Bonifacio Global City. PBB sees acquisition as a ticket to establishing a foothold in Metro Manila where bank branching is restricted.

PBB, for its part, has 125 branches, a loan portfolio of P38 billion and around P57 billion in total resources as of end-March. The bank, which debuted on the PSE in February 2013, has a market capitalization of nearly P8 billion.

Asked whether PBB is looking at more acquisitions, Avante said: “The BSP has been encouraging consolidation in the banking system. The bank is always open to a very strategic move.”