MANILA, Philippines - Lucio Tan's Allied Banking Corp. on Monday denied a published report that it was in talks with Industrial and Commercial Bank of China Ltd. (ICBC), the world's largest bank by market value, over a possible stake sale.
"We wish to inform you [the report] has no substative basis, and [its] description of the proposed transaction is at best, speculative," Ma. Cecilia Pesayco, Allied Bank corporate secretary told the Philippine Stock Exchange in a disclosure.
"Any expression of interest by any Chinese bank was made in 2010, and nothing definite was firmed up during the exploratory discussions," she added.
The Philippine Daily Inquirer, quoting unnamed sources, reported that ICBC plans to take over Allied Bank in a deal that would also allow the Lucio Tan group to expand into mainland China.
PDI sources described the supposed transaction as a "cross-sale or swap of branches."
Allied Bank is set to merge with Philippine National Bank, also controlled by Tan, to create the Philippines' fourth-largest lender in terms of assets.
According to the PDI report, ICBC's investment in Allied would be converted into shares in the merged entity.
Bloomberg News, meanwhile, reported that ICBC already expressed interest in investing in the local banking sector in the past. It quoted central bank deputy governor Nestor Espenilla as saying foreign banks are allowed to own up to 60% of any local lender.