06 November 2006
MS. JURISITA M. QUINTOS
Senior Vice President, Operations Group
PHILIPPINE STOCK EXCHANGE
4/F PSE Center, Exchange Road
Ortigas Center, Pasig City
Dear Ms. Quintos:
Further to our earlier disclosure on the proposed merger of Banco de Oro Universal Bank (the
“Bank”) and Equitable PCI Bank, Inc. (“EPCIB”), attached herewith are materials jointly
prepared by the Bank and EPCIB for dissemination to the press.
For your information. Thank you.
Very truly yours,
MARIO D. RABANAL
Officer-in-Charge
November 6, 2006
Banco De Oro Universal Bank and Equitable-PCI Bank
Announce Plan to Merge
Banco de Oro Universal Bank (“BDO”) and Equitable PCI Bank Inc. (“EPCI”) wish to announce
that their respective Boards of Directors today passed resolutions approving a plan to merge the
two companies. Both Boards have endorsed to their shareholders the approved Plan of Merger
for final ratification. Completion of the transaction is subject to regulatory approval and is
anticipated to close by the 1st quarter of 2007.
The combination will be structured as a merger and executed by means of a share-for-share
exchange. Under the proposed terms, BDO will serve as the surviving entity, and EPCI
shareholders will receive 1.80 BDO common shares for every EPCI share. The name of the
combined institution will be Banco de Oro – EPCI, Inc. The transaction will be the largest
merger in Philippine banking history.
The merged institution will be among the top 3 banks in the Philippines with combined total
assets of PHP613 bn (US$12.3 bn) as of September 30, 2006 and combined market capitalization
of approximately PHP 95.5 bn (US$1.9 bn) based on closing prices as of November 6, 2006. The
merged entity will have market leading positions in its core business lines including corporate
and middle-market banking, consumer banking, credit cards, asset management, remittances,
leasing and finance. The distribution network will be the third largest footprint in the industry
with 698 branches and 1,171 ATMs nationwide.
The combination of the branch networks and other businesses of BDO and EPCI will enable the
combined bank to serve its customers better and more efficiently than either institution alone.
Aside from the added convenience that will come from the expansion of the branch and ATM
network, the increased scale will better enable the new institution to invest in the most up-to-date
technology and develop more innovative products which will benefit both retail and corporate
customers. In addition, the combined bank will be better able to upgrade its risk management
and IT systems in order to address Basel II requirements.
The combined company is expected to realize substantial revenue and cost synergies from the
merger. There will be greater opportunities to expand fee-based income and cross-selling
potential through the combined bank’s expanded product offering and customer base and through
the SM Group network. The combined entity also expects to increase its low cost deposit
gathering capabilities through its larger distribution network. In addition, the merger will result
in significant cost efficiency improvements through the integration of information technology
platforms, sharing of marketing and product development costs, optimization of support
functions and other overhead costs.
Teresita Sy-Coson, Vice-Chairperson of the Board and Chairperson of the Executive Committee
of EPCI, said, “The merger of BDO and EPCI will bring together the banks’ organizational
strengths, which we believe will provide greater customer service and enhanced shareholder
value.”
Governor Amando Tetangco of Bangko Sentral ng Pilipinas described the proposed merger as an
important step in the ongoing development of the Philippine banking sector. He said, “The
proposed merger of BDO and EPCI will create a bigger and stronger institution which will be
among the leaders in the industry. It also continues the process of consolidation, which we
believe is positive for the Philippine banking system."
Deputy Governor Nestor Espenilla of Bangko Sentral ng Pilipinas added, “The merger of BDO
and EPCI raises the bar of competition for the Philippine banking industry. It is good for
financial stability and good for customer service."
BDO was advised by UBS Investment Bank in this transaction while EPCI was advised by ING
Bank N.V.
About Banco de Oro Universal Bank (“BDO”)
BDO is a universal bank, which provides a wide range of corporate, commercial, retail, and
investment banking services in the Philippines. These services include traditional loan and
deposit products, as well as treasury, private banking, trust, cash management, insurance,
remittance and credit card services.
As of the 3rd quarter of 2006, BDO was ranked 5th in terms of resources, loans and deposits
according to industry data. The Bank's consolidated total assets as of the 3rd quarter was at
PHP293 bn. Net loans as of the 3rd quarter stood at PHP84 bn while deposits was at PHP204
bn. The Bank has a distribution network of 251 branches and 513 ATMs nationwide.
In the 1st half of 2006, BDO was judged by AsiaMoney as Best Domestic Bank for 2005.
AsiaMoney also awarded the Bank as Best Managed Company - Mid-Cap Corporate for the
Philippines in 2005, while EuroMoney cited BDO as the Best Commercial Bank in the
Philippines. Likewise, wholly owned subsidiary BDO Capital & Investment Corporation (BDO
Capital) was also awarded the Best Equity House and Best Debt House by AsiaMoney while
Finance Asia cited the investment bank as Best Equities House and Best Investment House in its
recent 2005 Country Awards for Achievement.
About Equitable PCI Bank (“EPCI”)
Equitable PCI Bank (“EPCI”) is a universal bank in the Philippines and serves as a leading
provider of financial services including corporate and commercial banking, treasury, trust
banking, credit and payment cards, remittances, leasing and finance, and investment banking.
As of the 3rd quarter of 2006, EPCI was ranked 3rd in terms of resources, 4th in loans and
deposits according to industry data. The Bank's consolidated total assets as of the 3rd quarter
was at PHP321 bn. Net loans as of the 3rd quarter stood at PHP126 bn while deposits was at
PHP231 bn. The Bank has a distribution network of 447 branches and 658 ATMs nationwide.
EPCI was named Gold winner in the local bank category of the Reader’s Digest Trusted Brand
Award in 2005 and 2006, attesting to its continuous customer service excellence combined with
leadership in most of its markets. EPCI was also awarded the Best Domestic Bank in the
Philippines in 2004 and 2005 by The Asset, one of Asia’s leading regional finance publications.
Key highlights
 2nd largest bank by assets (combined assets of PHP613bn)
 3rd largest bank by net loans (combined net loans of PHP210bn)
 2nd largest bank by deposits (combined deposits of PHP435bn)
 3rd largest branch network (pro forma 698 branches)
 Dominant player in OFW remittances with market share of 25-30%
 Leading asset management business with combined AUM of PHP166bn
Investor Relations Contacts:
Banco de Oro Universal Bank
Luis S. Reyes, Jr.
Tel: (632) 702 6483
lsr@bdo.com.ph
richard.tan@equitablepcib.com
Equitable PCI Bank
Richard R. Tan
Tel: (632) 878 4809