Banco de Oro (BDO), the Philippines’ largest bank in terms of assets and deposit base, has announced that it is acquiring the local trust business of German financial services company Deutsche Bank.
In a disclosure submitted to the Philippine Stock Exchange, BDO said the deal covers the trust, fiduciary and investment management activities of Deustche Bank AG Manila branch.
The total acquisition cost and other details of the deal were not announced.
Deutsche Bank Group in the Philippines
Deutsche Bank has been operating as a commercial bank in the Philippines since 1995. Prior to acquiring a commercial banking license, it only operated an offshore banking unit (OBU) in Manila since 1977. In 2011, the bank was granted a universal banking license by the Bangko Sentral ng Pilipinas.
In recent years, Deutsche Bank managed the largest US dollar-denominated perpetual bond for Petron Corp. (PCOR) and the issuance of securities by SM Investments Corp. (SMIC), Energy Development Corp. (EDC), Rizal Commercial Banking Corp. (RCBC), Development Bank of the Philippines (DBP) and Landbank.
The Deutsche Bank Group in the country currently employs more than 2,000 staff. It has a joint venture, Deutsche Regis Partners, offering stock brokerage services and a business process outsourcing and shared services subsidiary, Deutsche Knowledge Services (DKS).
As of this writing, it is still unknown if and how many Deutsche Bank employees will be absorbed by BDO.
Like ING’s sale of trust unit to BPI
The transaction is reminiscent of the sale of ING’s trust business to the Bank of the Philippine Islands (BPI) in 2010. ING sold its trust and asset management unit to BPI as part of a move to separate its insurance-investment management and banking businesses, as required by the European Commission in 2009.
During the financial crisis in 2008, ING received 10 billion euros from the Dutch government as additional capital. As a condition of the bailout, the European Commission required ING to divest from its insurance and investment management operations.
With the acquisition, BPI absorbed a total of PHP78 billion assets under management (AUM) and 38 employees from ING Manila’s trust group.