BPI gets into digital banking space with Robinsons Bank merger

The planned merged with Robinsons Bank Corp. (RBC) of the Gokongwei Group will allow Ayala-led Bank of the Philippine Islands (BPI) to play in the digital banking space, according to independent credit research provider CreditSights Inc.

CreditSights co-head of Asia Pacific research Pramod Shenoi and analyst for Asia Pacific banks Lim Ze Hao said the consolidation of BPI and RBC is positive as both institutions are focusing on digitalization.

“Post-transaction, BPI would be able to play in the digital bank space as well, which would further aid its push into retail. Synergies across several products and service platforms of both banks are to be expected, as with collaboration and new business opportunities across the Gokongwei conglomerate’s extensive ecosystem of businesses,” CreditSights said.

The Gokongwei Group, through JG Summit Capital Services Corp. and Robinsons Retail Holdings Inc., own RBC that has a 20 percent stake in GoTyme Bank Corp.

GoTyme Bank, a partnership between the Gokongwei Group and Singaporebased digital banking group Tyme, was one of the six entities granted digital banking license by the Bangko Sentral ng Pilipinas (BSP).

The regulator has imposed a three-year moratorium on the grant of digital banking license to closely monitor the performance and impact of the new banking classification on the industry.

While not as strong as BPI, CreditSights said RBC is fundamentally sound and has a business mix complementary to BPI’s medium-term strategic plan of growing its combined retail as well as small and medium enterprises (SME) share of total loans to 30 percent from the present 25 percent.

As BPI is also much larger than RBC, it said the impact to its capital ratios, reserve cover and non-performing loan (NPL) ratio is likely to be marginal.

BPI has rolled out several new digital platforms and established partnerships with GCash and Alipay+, while RBC together with other Gokongwei entities own a 60 percent stake in GoTyme.

For BPI, CreditSights said the proposed merger further expands its client base and scale, making it the second largest private lender in the Philippines next to Sy-led BDO Unibank Inc.

As for RBC, the company said that the difficulty involved in scaling up its business likely drove the conglomerate’s decision to sell its banking unit to a larger competitor.

“The transaction is expected to close before the end of 2023, subject to other shareholder and regulatory approvals,” it added.

The Gokongwei Group will end up with an approximately six percent stake in BPI as well as a board seat.