, Philippines
Photo courtesy of Cytonn Photography.

BPI cements market position with Robinsons Bank merger: analyst

Assets are slated to increase by 0.9 percentage points.

Bank of the Philippine Islands or BPI’s planned merger with Robinsons Bank Corporation is expected to bring net positives to BPI, analysts said.

The merger will strengthen BPI’s domestic presence, according to S&P Global Ratings analysts Ivan Tan and Richard Noonan. 

“We believe the merger should cement BPI's market position as one of the largest privately owned banks in the Philippines, with its market share slated to increase by about 0.9 [percentage points],” Fitch Ratings wrote in a separate commentary.

BPI will be the surviving entity after the merger, which is set to be completed before end-2023. Existing RBC shareholders will hold approximately 6% of the amalgamated entity. BPI will also be acquiring more than 150 branches.

Immediate financial implications should be manageable for BPI, considering RBC’s relatively modest scale and reasonable financial profile, Fitch added.

ALSO READ: Pandemic pushes banks to adapt hybrid set-up for transaction banking services

Although RBC's asset quality is weaker than that of BPI, Fitch estimates that the acquired non-performing loans (NPLs) would increase BPI's NPL ratio by only about 0.2 percentage points, given that RBC's total balance sheet is just 7% of that of BPI.

The merger will also strengthen ties between the two banks’ parent companies, Ayala Corp. and the Gokongwei Group.

“The merger could generate lending and fee income opportunities, given Gokongwei Group's diverse business operation across the country. In our view, operational integration would be manageable, and could present cost synergies via elimination of branch overlaps, given both banks have a domestic focus,” Tan and Noonan said.

The deal would also see BPI gain a 20% stake in GoTyme Bank, the digital bank joint venture between RBC, Gokongwei Group and Singapore-based GoTyme. Fitch said that this would help BPI broaden its retail offerings and tap new, albeit potentially higher-risk, underserved customers in the Philippines. 

“The incremental credit risks from expanding into underbanked sectors will hinge on BPI's strategy and risk posture, which we expect to remain relatively disciplined. Moreover, we believe higher interest rates and softening business and consumer sentiments are likely to temper BPI's loan growth momentum in the near term,” the ratings agency noted.

Follow the links for more news on

Join Asian Banking & Finance community
Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!


ZA Bank’s Devon Sin on why Web3 is key to HK’s growth
The bank has expanded services to cater to stablecoin issuers and Web3 companies. 
Retail Banking
CIMB Niaga leads the way in captivating Indonesia’s youth
The bank’s digital solutions are winning over younger generations with 3.2M mobile users and 96% digital transaction rate in 2023.