Ayala and Gokongwei groups, two of the Philippines' most powerful conglomerates, are considering a possible "collaboration" on banking, the companies said on Friday, as lenders in the country move to build scale and navigate a wave of digitalization.
Ayala owns Bank of the Philippine Islands, the country's fourth-largest lender by assets, while Gokongwei Group's Robinsons Bank (Rbank) is the 17th biggest, according to data from the Philippine central bank as of the end of March.
"We are in discussions on a potential partnership between BPI and Rbank," BPI told the Philippine Stock Exchange.
Gokongwei-led JG Summit Holdings separately confirmed that BPI is in "preliminary" discussions with JG Summit Capital Services and Robinsons Retail Holdings, which own 60% and 40% of Robinsons Bank, respectively.
The comments came in response to a newspaper report that the conglomerates are working on a merger between BPI and Robinsons Bank, with BPI as the surviving entity. Neither side commented directly on whether a merger was being discussed.
Such a merger, if it materialized, would make BPI the country's second-largest private lender, with total assets of around 2.5 trillion pesos ($42.7 billion).
It would would also bring together banks backed by two of the country's largest business groups.
Ayala, the country's oldest conglomerate, has interests in real estate, telecom, energy and healthcare, among other sectors. It recently appointed former BPI president Cezar Consing as its new CEO. JG Summit, for its part, is involved in industries that include food and beverage, airlines and petrochemicals.
Robinsons Bank, a commercial bank, has struggled to reach a size comparable with other conglomerate-backed lenders. BDO Unibank, the country's biggest bank, is a unit of SM Investments of the Sy family while Metropolitan Bank & Trust Company, the third largest, is under Ty family-led GT Capital Holdings.
But Robinsons Bank has a stake in GoTyme Bank, a joint venture between the Gokongwei Group and Tyme, a fintech company headquartered in South Africa. GoTyme is one of the six digital bank licensees in the Philippines.
Meanwhile, BPI last year merged with its wholly-owned thrift banking arm BPI Family Savings Bank, and has been eager to expand, including through acquisitions.
The firm last year expressed interest in buying the Philippine consumer banking business of Citigroup, which was eventually acquired by Union Bank of the Philippines, the banking arm of Aboitiz Group, another major conglomerate.