BDO buying Keppel PH Properties out of Ortigas venture

BDO Unibank Inc., the country’s largest bank, said Monday it is buying out the entire equity interests of its joint-venture partners in SM Keppel Land Inc., a company engaged in developing, operating and managing the property known as the Podium Complex along ADB Ave. in Ortigas Center, Mandaluyong City.

“In view of Keppel Philippines Properties Inc.’s and Opon-KE Properties Inc. decision to divest its investment in SM Keppel Land Inc., BDO Unibank Inc., as Keppel’s joint venture partner, has agreed to buy out Keppel’s 50-percent direct equity ownership in SMKL,” the bank said in a disclosure to the stock exchange.

BDO’s board of directors approved on March 25, 2023 the purchase, which consists of 217,910,000 common shares and 36,401,500 redeemable preferred shares equivalent, to 50 percent of the outstanding capital stock of SMKL at adjusted net asset value at closing.

“By this acquisition, BDO will consolidate its ownership of the Podium Complex, presently 50-percent owned by SMKL, consisting of BDO’s Corporate Center Ortigas, the West Tower and the Podium Mall,” the statement said.

The Podium Complex houses BDO’s offices in Ortigas. BDO occupies about 63 percent of the office spaces in the Podium Complex.

The parties also signed the share purchase agreement covering the transaction. Completion is subject to, among others, customary closing conditions applicable to transactions and regulatory approvals.

BDO solidified its industry leadership following a 33.4-percent increase in net income last year to a record P57.1 billion from P42.8 billion a year ago. The bank managed to sustain its profitability amid a very challenging business environment due to higher interest rates and inflation.

The 2022 results led to a return on average common equity of 13 percent, improving to 15.3 percent for the fourth quarter, from 10.5 percent in 2021 and 12.8 percent in 2019 before the onslaught of the pandemic.

Non-interest income rose 17 percent to P71.5 billion on the strong performance of fee income, foreign exchange and fixed income client-flow businesses.

Asset quality improved further, with non-performing loan ratio declining to 1.95 percent and NPL coverage strengthening to 167 percent.

Total capital expanded to P461.5 billion, with capital adequacy ratio and common equity tier 1 ratio both comfortably above regulatory minimum levels at 14.5 percent and 13.4 percent, respectively. Book value per share rose 9 percent to P86.20.