Byline: LEE C. CHIPONGIAN

Banco de Oro Universal Bank and United Overseas Bank Limited of Singapore yesterday concluded a share-swap arrangement under which BDO will acquire the 66 branches of OUB Philippines.

UOB head office in the meantime will acquire shares in BDO, according

BDO is paying R600 million to acquire 66 of 67 UOB branches in the Philippines and this amount will be used to subscribe to BDO shares.

When asked after a meeting between BDO President Nestor Tan and key central bank officials yesterday, Deputy Governor Amando M. Tetangco only said that UOB is staying and will not pull out of the country.

In Singapore, UOB said that its unit United Overseas Bank Philippines (UOBP) is to sell its branches to Philippinebased Banco De Oro. "BDO will assume UOBPs branch deposit liabilities," UOB said in a statement, adding that it would also pay R600 million to UOBP which would be used to subscribe to an issue of new BDO shares. UOB added that the Philippine unit is applying to downgrade its operations from a commercial bank to a thrift bank in order to focus on wholesale banking and feebased income, the announcement added.

"Weve just signed an agreement with them to acquire their retail banking business in the Philippines," . "They plan to concentrate on the wholesale banking business," Reyes said.

In 1999, UOB paid R3.3 billion ($82.5 million) for 60 percent of the Philippines-based Westmont Bank. It later renamed it UOB Philippines.

UOB Philippines incurred a loss of S$21.2 million ($12.9 million) last year and a S$19.7 million loss in 2003. UOB earned a net profit of S$1.54 billion in 2004.

At UOBs annual shareholders meeting on April 27, Chairman Wee Cho Yaw had faced investor questions over what the group planned to do with the Philippines unit. UOB derives about 80 percent of its earnings from its domestic market.

UOB is bigger than DBS Bank. It is a leading bank in Singapore and a dominant player in Asia-Pacific, according to company information. As at 31 December 2004, the UOB Group had total assets of S$134.9 billion and shareholders funds of S$13.4 billion.

UOB as a bank provides a wide range of financial services through a global network of branches/offices and subsidiaries/associates. It has a vast network of 385 offices around the world, operating 61 branches in Singapore and over 380 offices in Australia, Brunei, Canada, China, France, Hong Kong, Indonesia, Japan, Malaysia, Myanmar, Philippines, South Korea, Taiwan, Thailand, United Kingdom, USA and Vietnam.

BDO, on the other hand, is one of the fastest growing bank in the Philippines.