US firms, San Miguel interested in UCPB

The planned sale of the Philippine government's majority stake in United Coconut Planters Bank (UCPB) has drawn interest from US private equity companies and domestic conglomerate San Miguel Corp., a person with knowledge of the matter said.

 

While the expected deal size is small at around P16.1 billion, it is the first sale of a controlling stake in a Philippine bank since the government passed a law last year that allowed overseas firms to take full control of local lenders.

 

Growth in the Philippine economy and in demand for loans has outpaced that of other countries in the region, also boosting the appeal of the sector to foreign firms.

 

CAP IV Engagement Limited, an affiliate of Carlyle Asia Partners IV, Lone Star Funds and TPG Capital Management, have submitted letters of intent to bid, said the person, who was not authorized to speak to the media on the matter.

 

Japan's Mitsubishi UFJ Financial Group Inc. (MUFG) is the only foreign bank in the race that also contains a bevy of local lenders, the person added.

 

The government plans to sell its 73.9 percent stake in UCPB, the country's 12th largest lender, for a minimum of P1.1 billion but has also stipulated that the winning bidder must inject at least P15 billion in capital.

 

Carlyle Group and TPG declined to comment while Lone Star did not return a Reuters request for comment. A spokesman for MUFG declined to comment.

 

A second source, declining to be identified as the person was not authorised to speak on the matter, confirmed that San Miguel intended to bid.

 

The government has been keen to encourage consolidation in the sector which has some 700 lenders, mostly minnows. That compares with 120 banks in Indonesia, the region's largest economy and which has double the population of the Philippines.

 

UCPB had assets worth nearly P260 billion as of end 2014 and more than 200 branches.

 

Among the local lenders, BDO Unibank Inc., which is the Philippines' largest bank by assets, Security Bank Corp., Rizal Commercial Banking Corp. and JG Summit Holdings Inc.'s Robinsons Bank Corp. have said they are interested.

 

The deadline to submit pre-qualification documents has been pushed back to July 16 from June 30 after the parties asked for more time to prepare, said Toni Coo, officer-in-charge of the Department of Finance's privatisation office.

 

She said there had been 12 letters of intent to bid, of which four came from foreign firms, but declined to comment further. – Reuters