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East West Banking in stake sale: Bloomberg
Posted on Friday, 19 May 2017 10:29
Philippine lender East West Banking is hoping to pique the interest of a strategic investor in a sale of a minority stake as the country’s financial institutions look for overseas partners in order to meet higher capital requirements, Bloomberg reported.

Sources with knowledge of the situation told the news provider the Taguig-headquartered commercial bank is already working with an advisor on attracting a suitor to a 20.0 per cent interest.

The people asked not to be identified and they did not disclose any further information, though Bloomberg noted the group said earlier this month it was not ruling out opening up its shareholder base to a new investor.

It added Japanese and Taiwanese suitors have turned their sights on the Philippines’ financial sector ever since 2014 when the government changed its regulations on foreign bank ownership.

Zephyr, the M&A database published by Bureau van Dijk, supports this suggestion as over the last five years Bank of Tokyo-Mitsubishi, Cathay Life Insurance and Yuanta Commercial have all been attracted to the country.

On the other hand, Philippine lenders are looking into ways of funding loan growth and meeting higher capital requirements, and even the bank regulator has admitted they need foreign capital, Bloomberg noted.

Bangko Sentral ng Pilipinas’ deputy governor Nestor Espenilla told the news provider in an interview in January last year some of the country’s biggest players run by wealthy families need to meet an increase in competition from overseas.

He said: "If they think they can continue to grow at the pace that protects their position in the market using only internal resources, good luck to them.

"Banks today with a relatively close ownership may want to take a more open view. Or, they face stagnation, shrinkage."

© Zephus Ltd