PNB, Allied Bank new owners of Chinese bank

Two Philippine banks controlled by tycoon Lucio Tan have remitted their combined equity investments in a Xiamen-based lender, making them the first to own a locally-incorporated commercial bank in China. Both the Philippine National Bank (PNB) and the Allied Banking Corp. now control 90 percent of Allied Commercial Bank (ACB) after the two lenders remitted 548 million Chinese yuan ($80 million) to China. The remittance is part of its 591 million Chinese yuan investment in ACB. The remaining balance of 43 million yuan is expected to come from Allied Bank's conversion of its share in undivided profits into equity. The China Banking Regulatory Commission allowed ACB to hike its authorized capital to one billion Chinese yuan, enabling it to “expand its banking operations beyond its present head office in Xiamen and branch in Chongqing," PNB said in a letter to the exchange. The investment in ACB falls within the overall strategic direction of the bank, PNB corporate secretary Renato J. Fernandez said in the same document. The investment will allow PNB to have a significant opportunity to venture into the hugely untapped overseas Chinese workers market, Fernandez said. “Collaboration between PNB and ACB is projected to result in significant synergies for PNB. Aside from generating increased revenues, it will provide worldwide marketing exposure for PNB that will boost its market share and leadership in the overseas Filipino worker (OFW) remittance business)," he said. With the additional investment, PNB will own 39.4 percent of the Chinese bank while Allied Bank will be the majority owner at 50 percent. The remaining 9.6 percent of ACB will be owned by individuals. In a separate disclosure, Allied Bank first senior vice president Zacarias E. Gallardo Jr. said the bank made an outward investment to subsidiary ACB amounting to $22.53 million equivalent to 153.98 million Chinese yuan. PNB said the Chinese bank would take advantage of its network of overseas branches to service remittance requirements of the overseas Chinese workers. "The three banks will benefit from tapping into each others' competencies and inherent synergies to pursue business opportunities and better serve its chosen markets especially the Chinese markets," it added. - GMANews.TV