BPI to merge two subsidiaries

BPI to merge two subsidiaries
By LEE C. CHIPONGIAN
June 15, 2011, 2:46am

MANILA, Philippines — Bank of the Philippine Islands (BPI), the country’s third biggest bank in asset size, is merging two of its subsidiaries, BPI Capital Corp. (BPICC) and BPI Bancassurance Inc. (BBI) as part of its business structure reforms.

BPI has asked the Bangko Sentral ng Pilipinas (BSP) to approve the merger with BPICC as the surviving company.

Based on documents submitted to the BSP, BPI said merging the two entities will eliminate duplication and streamline operations. The combined resources of BPICC and BBI will also benefit the parent bank in terms of cost savings.

BPICC is an investment house with quasi-banking functions. It has total assets of P3.04 billion. Last year the company earned P162.4 million.

BBI, a fully owned subsidiary of BPI with net assets of P52 million, has been inactive since 2009. In 2010 it reported a loss of P25 million. It used to be in the business of marketing life and non-life insurance products.

In 2009, BPI transferred 51 percent of its shareholdings in Ayala Life Assurance Inc. to the Philippine American Life and General Insurance Co. (PhilamLife).

It was noted in the proposal to merge that the Insurance Commission has no objection to the merger of the two BPI subsidiaries.

BPI has been expanding insurance products to cross-sell following the creation of BPI-Philam Life Assurance Corp.

BPI-Philam Life, formerly Ayala Life, is the bancassurance of BPI. Philam Life, the biggest insurer with 250,000 agents, is a unit of the AIA Group. Ayala Life, in the meantime, is the sixth largest out of 32 life insurers.

Bancassurance give banks more business and expand the network for the insurance sector. Presently, insurance policies allowed under this scheme are limited only to whole life insurance, endowment, term insurance (including mortgage redemption insurance), health and accident policies, life annuities and variable life insurance contracts.

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