Malaysia's CIMB close to acquiring 60% stake in Philippines' BoC

CIMB's acquisition of a 60% stake in the Bank of Commerce is now awaiting the Philippine central bank's approval.

Bank of Commerce’s chairman Jose Pardo said the signing would happen “shortly” with the deal awaiting the approval of the central bank.

Pardo said early last month that the price for the stake had been agreed on.

Although both parties have not publicly indicated at what price the stake would be purchased for,various news reports have valued the stake at below RM1bil. San Miguel holds a 76% stake in the bank.

Pardo said with the stake, CIMB would likely get eight of the 15 board seats in the bank.

The Philippine's limits foreign ownership of banks to a maximum of 40% or 60% depending oneligibility.

Analysts have noted that CIMB should qualify for the upper limit ownership based on the bank’sfinancial position and ranking.

Analysts have pointed out that the BoC stake acquisition would not contribute significantly toCIMB’s group earnings since the former’s market share of loans was estimated late last year to bearound 3.4%.

The acquisition was to complement CIMB’s ambition to be among the top three banks in Asean andstrengthen its strategy to be a significant regional player.

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