UOB to operate as commercial bank in Phl
Singapore- based United Overseas Bank Limited (UOB) is set to operate as a commercial bank in the Philippines as part of the second wave of bank liberalization program in the country.
Kelyn Tan of the group strategic communications of UOB confirmed the Bangko Sentral ng Pilipinas (BSP) has approved the bank’s application to operate as a commercial bank in the country.
“We received approval from the BSP to establish a branch with a commercial banking license in the Philippines,” Tan said.
The bank, through UOB Philippines, currently operates as a thrift bank in the country offering a full range of thrift bank products and services to individuals and corporations.
UOB Philippines acquired a 60 percent stake in Westmont Bank in November 1999. UOB increased its ownership stake in UOB Philippines to 100 percent from 60 percent in July 2012.
Eventually, UOB Philippines converted from a commercial bank into a thrift bank in 2006 after it sold 66 branches to Banco De Oro Universal Bank, now known as BDO Unibank of retail and banking magnate Henry Sy.
The bank was founded by Datuk Wee Kheng Chiang in 1935 as the United Chinese Bank but was renamed UOB in 1965. The UOB Group has a network of more than 500 offices in 19 countries and territories in Asia Pacific, Western Europe, and North America.
UOB is the sixth foreign bank to be given the green light by the BSP to operate n the country. These include Sumitomo Mitsui of Japan, Shinhan Bank of South Korea, Cathay United of Taiwan, the Industrial Bank of Korea, and Yuanta Bank of Taiwan.
President Aquino signed Republic Act No. 10641 in July last year amending the foreign banks law by removing the limit on foreign banks in the country earlier set at only 10.
Foreign banks under the new law have also been allowed to own as much as 100 percent of any local bank, removing the previous cap of 60 percent.
Earlier, BSP Deputy Governor Nestor Espenilla Jr. said there is more room to accommodate the entry of foreign banks in the country despite the green light given to five foreign banks to set up shop in the Philippines.
“To begin with, the foreign bank penetration in the country is actually very small,” he said.
Espenilla said foreign banks operating in the Philippines currently account for only 11 percent of the total assets of the country’s banking industry compared to the 40 percent ceiling.
“Theoretically, it is still fourfold but you should remember that assets of Philippine banks are not sitting in place. Philippine banks are growing really fast,” he added.
The Philippine banking industry remains attractive to foreign players due to its 100-million population and a low credit penetration.
Foreign banks were allowed to set up shop in the Philippines in the first wave of liberalization through RA 7221 passed in 2003.
Foreign banks in the Philippines include Citibank NA, the HongKong and Shanghai Banking Corp., Maybank Philippines, Bank of Tokyo-Mitsubishi UFJ Ltd., Standard Chartered Bank, ANZ Banking Group Ltd., JP Morgan Chase Bank NA, Mizuho Bank Ltd., ING Bank NV, CTBC Bank Philippines, Deutsche Bank AG, Mega International Commercial Bank Co. Ltd., Bank of China Limited, Bangkok Bank Public Co. Ltd., Korea Exchange Bank, and Bank of America NA.