Updated January 24, 2009 12:00 AM [ philstar.com ]
EastWest Banking Corp., the banking unit of the Gotianun family’s Filinvest Group, has acquired the local consumer banking, car financing and leasing subsidiaries of troubled US insurance giant AIG in a deal reportedly valued at P2 billion.
The purchase of AIG Philam Savings Bank, Philam Auto Finance and PFL Holdings Inc. represents the first phase of AIG’s divestment of its Philippine businesses.
Industry sources said the purchase price is a 25-percent premium over the companies’ combined book value of P1.6 billion.
The remaining assets, including the flagship Philippine American Life and General Insurance Co. (Philamlife), are likely to be sold in a single package, industry sources added.
The Philamlife Group, with total assets of P170 billion as of end-2007, is being sold by AIG as part of its global fund-raising to repay billions of dollars worth of debt to the US government.
EastWest, a medium-sized commercial bank, said its takeover of AIG Philam Savings would boost its asset size to P63 billion from the current P42 billion.
“The acquisition of AIG Philam Savings Bank and the two related companies will lead to the expansion of EastWest Bank’s retail banking business and support its intention to become a more significant player in the industry,” said East West Bank president and chief operating officer Antonio Moncupa.
AIG Philam Savings, with total assets of P13 billion in 2007, is ranked the ninth largest thrift bank in the country.
“We will keep the thrift bank license as it is a valuable asset for our strategic plans,” Moncupa added.
EastWest will absorb the nine branches of AIG Philam Savings as well as the strong credit card and auto loan business of the thrift bank.
The combined auto loan receivables of P8 billion and card receivable level of over P8.3 billion will catapult EastWest into becoming the sixth largest credit card issuer and auto loan provider in the country.
The combined banks will have a total of 89 branches, 54 of which are in the Metro Manila area.
Meanwhile, Philamlife president and chief executive officer Jose L. Cuisia Jr. expressed satisfaction over the sale of its banking assets,
“We are pleased with the bid process and believe the outcome serves the best interests of all parties. We look forward to a smooth transition and integration process,” he pointed out.
AIG went bankrupt last year under the wave of corporate disasters directly related to the US subprime mortgage fiasco. It received a total rescue loan package worth $150 billion from the US government. – Ted Torres