SSS to benefit from Equitable-BDO merger

Pension fund Social Security System (SSS) said it will earn more from its investment in Equitable PCI Bank if it merges with Banco de Oro Universal Bank. In a letter to Finance Secretary Margarito B. Teves, SSS President and CEO Corazon S. dela Paz enumerated four benefits from the "merger of equals" proposed by mall magnate Henry Sy’s Banco de Oro. These include improved earnings due to synergies and cost efficiencies; better stock price due to anticipated re-rating; lower funding cost due to improved credit rating; and regular dividend pay out. Ms. Dela Paz said SSS will have to find out if the merger would indeed add value to their investment and give a better return to their members. As Equitable PCI chairman, Ms. Dela Paz said the bank will study the proposal thoroughly. "While it is the government’s policy to encourage mergers among banks to strengthen the banking sector in the country, we in the board of EPCIB must look at the offer on how it will affect the bank overall," Ms. Dela Paz said. Last January, Banco de Oro offered to merge with Equitable via a share swap deal, one Equitable PCI share for every 1.6 Banco de Oro shares. -BusinessWorld