Company LOGO “Security you can bank on” Security Bank – Federal Savings Bank Group IV www. company. com
Company LOGO Mergers and Acquisitions? • Merger and consolidation was a major theme of the Philippine financial system during the first half of 2000. • Banks and non-banks alike sought ways to rapidly gain financial and marketing strength amid the growing competition in the Philippine financial system. www. company. com
Company LOGO Mergers and Acquisitions? • The Bangko Sentral stepped up its efforts aimed at rationalizing existing policies, rules and regulations in the supervision and examination of financial institutions. • To further speed up the creation of bigger and stronger banks, an enhanced incentive package for mergers and consolidations was offered (Box 1). www. company. com
Company LOGO What is the Box 1? • This was done to foster healthy competition between and among banks, bring about more and better financial services at lower cost, and promote stability and efficiency in the Philippine banking sector. www. company. com
Company LOGO The Acquirer - SBC • SBC was incorporated on May 1, 1951 and started operations as a commercial bank on June 18, 1951. • It acquired its universal banking license from the BSP last April 26, 1994 where it changed its name from Security Bank and Trust Company to Security Bank Corporation. www. company. com
Company LOGO The Acquirer - SBC • Commercial banking operations include Corporate Relationship, Branch Banking, and Consumer Lending Groups. • Investment banking includes Treasury Group, Fixed Income and Securities Division, and Investment House www. company. com
Company LOGO The Acquirer - SBC • Had its IPO on June 8, 1995. • Security Bank Corporation provides commercial banking and investment banking services in the Philippines. • As of 31 December 2006, the Security Bank Corporation had a network of 114 online branches and 93 ATMs. www. company. com
Company LOGO The Acquired – FS & MB • This bank was established on 1998 after the Asian crisis. • The owner of the bank, Henry Go, also has interest in real estate and cargo handling business. • Federal Savings, a relatively small bank has three branches located in Makati, Laguna and Novaliches has total resources amounting to P 500 Million only. www. company. com
Company LOGO The Acquired – FS & MB • On September 30, 2000 Security bank purchased all of the common stocks of Federal Savings and Mortgage bank for a total cost of about P 461 million in exchange for 18, 627, 761 shares. • The fair value of assets acquired amounts to about P 540 million and P 273 million of this balance are cash and cash equivalents. www. company. com
Company LOGO The Acquired – FS & MB • Total liabilities amounts to about P 216 million. • The excess of the total acquisition cost over the fair value of the net assets acquired of about P 137 million is treated as goodwill being amortized on a straight-line basis over ten years. www. company. com
Company LOGO Why FS & MB? • Federal Savings and Mortgage bank is a potential target, it is newly established when it was acquired. This means that they still have clean financial statements. Security Bank saw the potential of Federal savings. www. company. com
Company LOGO Consolidated FS Income Statement Data (in Millions) For the years ended 2000 1999 Interest Income 5, 383 4, 232 Interest Expense 3, 294 2, 437 Net Interest Income 2, 089 1, 795 892 882 2, 065 1, 694 Provisions 486 407 Taxes paid 363 361 Net Income 422 412 Other Income OPEX www. company. com
Company LOGO Consolidated FS Balance Sheet Data (in Millions) For the years ended 2000 1999 Total Resources 78, 843 55, 323 Total Deposits 46, 798 34, 634 Loan Portfolio (net) 32, 763 28, 228 Total Liquid Assets 30, 008 17, 400 Total Earning Assets 48, 743 41, 040 Total Capital Funds 8, 667 7, 781 www. company. com
Company LOGO Consolidated FS • Federal Savings’ assets are only P 550 million which was accounted for at the consolidated financial statements of Security bank on September 2000. • Before mergers in the year 2000 the bank has a total asset of P 55 billion • In the year end financial statement of 2000 these amounts increased. In addition to this is the increase in total resources, net loan portfolio, and total deposits of SBC. www. company. com
Company LOGO Rankings • The Philippine banking industry on the year 2000 has a total of 12 universal banks, 13 domestic commercial banks, 2 government banks and 16 branches of foreign banks. After merging with Federal savings in 2000, Security Bank Corporation ranked 8 th in terms of consolidated assets with P 71 billion. The leading bank that time is Metropolitan Banking Corporation with P 439 B in assets. www. company. com
Company LOGO Members: • Bagares, Franz Josef • Balido, Patrick Christian • Bautista, Dave Roland • Cariño, Michael Aldrin • Go, Garrick Shane • Luneza, Romelyn • Maunahan, John Wendell www. company. com
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