GE Capital, the financial services unit of US-based conglomerate General Electric Co., will merge its Philippine banking unit with Banco de Oro (BDO).
In a definitive agreement signed by the two institutions, GE Capital will acquire a 1.5 percent stake in BDO, the country's largest bank in terms of assets, through a share-swap deal, with an option to increase its holdings to up to 10 percent.
"We welcome the opportunity to be partners with an institution like General Electric. With GE's expertise in the financial sector, we hope this partnership will ultimately provide our customers with better consumer products and flexible financing solutions," said BDO chairperson Teresita Sy-Coson.
The transaction is still subject to closing conditions and regulatory approval of the Bangko Sentral ng Pilipinas and may be completed in the third quarter of this year.
With the consolidation, BDO will absorb GE Money Bank's 31 branches, 30,000 customers, and 38 ATMs nationwide.
"BDO's superior market presence and clear strategy for growth will provide the business with the best opportunities for success. In addition, key customers and depositors will benefit from the best that both banks have to offer, with greater convenience and a wider range of products and services than ever before," said Mark Arnold, chief executive officer of GE Capital Global Banking in Southeast Asia.
As of the first quarter this year, BDO ranked first in total resources, trust assets, loans and deposits. It has a network of over 700 branch licenses and more than 1,200 ATMs.
BDO has one of the largest distribution networks in the Philippines with an offshore branch located in Hong Kong and an overseas network of 21 remittance offices.
BDO is into retail banking, lending (corporate, commercial, consumer, and SME), treasury, trust, credit cards, corporate cash management and remittances. Through its subsidiaries, the bank offers Leasing and Financing, Investment Banking, Private Banking, Bancassurance, Insurance Brokerage and Stock Brokerage services.
GE Money, on the other hand, is a leading global provider of innovative financial products and services. In 2005, it acquired a majority interest in Keppel Bank Philippines, which it later renamed as GE Money.
GE Money Bank is known for its global competencies in risk management, analytics, business management practices, and has a strong track record of growth in emerging markets.