MICROCAPITAL BRIEF: TPG Growth Acquiring 40% in One Network Bank from Banco de Oro Unibank of Philippines

TPG Growth, a subsidiary of the private equity firm TPG, recently announced its intention to purchase a 40-percent equity stake in One Network Bank (ONB), a rural subsidiary of Banco de Oro Unibank (BDO), a Philippines-based commercial bank. The acquisition is subject to regulatory approval and the final terms of the transaction are not yet published. BDO plans to retain an ownership of approximately 60 percent in ONB once the transaction is successfully completed.

Ganen Sarvananthan, the head of TPG’s Southeast Asia office, said that “TPG has worked with many highly impactful financial services businesses across Asia. […] Together, BDO and ONB have built an impressive foundation. We look forward to bringing all that we’ve learned into a collaborative partnership and expanding the impact they’ve already created”[1].

As of 2013, ONB reported total assets of PHP 26 billion (approximately USD 1 billion), deposits of PHP 18 billion (approximately USD 384 million) and profit before tax of PHP 999 million (approximately USD 21 million). More recent financial data on ONB is unavailable. In the year 2015, BDO reported total assets of PHP 2.030 billion (approximately USD 43 billion), a gross loan portfolio of PHP 1.280 billion (approximately USD 27 billion), deposits of PHP 1.665 billion (approximately USD 36 billion), return on assets of 1.3 percent and return on equity of 13.6 percent. As of April 2016, TPG manages USD 70 billion invested in private equity, venture capital, real estate and debt, of which approximately USD 7 billion is managed by TPG Growth.

By Imke Herholdt, Research Associate

About One Network Bank (ONB)
One Network Bank (ONB) is a rural bank headquartered in Davao City in the Philippines. ONB was founded in 2004 through the consolidation of three rural banks in the country: Rural Bank of Panabo, Network Rural Bank (Davao) and Provident Rural Bank of Cotabato. In 2014 it was acquired by Banco de Oro Unibank (BDO), a Philippines-based commercial bank, to become a wholly owned subsidiary of BDO. For the year 2013, ONB reported total assets of PHP 26 billion (approximately USD 1 billion), deposits of PHP 18 billion (approximately USD 384 million) and profit before tax of PHP 999 million (approximately USD 21 million). For the same period, ONB employed approximately 1,500 employees in approximately 100 branches and offices. More recent financial data on ONB is unavailable.

About Banco de Oro Unibank (BDO)
Established in 1968, Banco de Oro Unibank (BDO) is a Philippines-based commercial bank that provides services including lending to corporate clients, small- and medium sized enterprises (SMEs) and retail customers; deposit-taking; currency exchange; management of trusts and investments; corporate cash management and administration of remittances. Through its subsidiaries, BDO also offers leasing, investment banking, private banking, insurance brokerage and stock brokerage services. As of 2015, BDO reported total assets of PHP 2,031 billion (approximately USD 43 billion), gross loan portfolio of PHP 1,279 billion (approximately USD 27 billion), deposits of PHP 1,664 billion (approximately USD 36 billion), return on assets of 1.3 percent and return on equity of 13.6 percent. BDO currently has approximately 1,048 branches in the Philippines.

About TPG Growth
TPG Growth is the subsidiary for investing in “middle-market buy-out opportunities[5]” of TPG, a global private investment firm that was founded in 1992 and is based in the US city of Fort Worth, Texas. As of April 2016 TPG has offices in Austin, Beijing, Dallas, Fort Worth, Houston, Hong Kong, Istanbul, London, Luxembourg, Melbourne, Moscow, New York, San Francisco, Sao Paulo, Singapore and Tokyo. As of the same date, TPG has USD 70 billion invested in private equity, venture capital, real estate and debt, of which approximately USD 7 billion is managed by TPG Growth.

Sources and Additional Resources
[1] BusinessWire: TPG Growth to Acquire 40 Percent Stake in One Network Bank from BDO
[2] MicroCapital Universe Profile: TPG
[3] BDO Unibank Incorporated
[4] MicroCapital Universe Profile: Banco de Oro Unibank (BDO)
[5] TPG Growth
[6] One Network Bank

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