The Philippine law would replace a cap of 60 per cent on foreign ownership and abolish previous rules that allowed just 10 foreign banks in the country.
A planned law allowing foreign firms to take full control of Philippine lenders is drawing eager suitors to the sector, including
The attraction also lies in
Others scoping out acquisition opportunities are private equity firms such as TPG as well as Taiwanese banks, the bankers said, adding that targets include
The Philippine law would replace a cap of 60 per cent on foreign ownership and abolish previous rules that allowed just 10 foreign banks in the country. Already passed by
It is one of a slew of economic reforms led by Aquino that follow the Southeast Asian nation's long sought attainment of an investment grade credit rating last year, and brings
Gaining full control of a local bank, as opposed to just 60 per cent, will allow foreign banks to merge a Philippine lender's operations with their own - a strategy that makes it easier for them to capitalise on regional trade flows and serve companies in their home countries that want to invest in
The latter motivation is particularly true of Japanese banks like Mitsubishi UFJ, banking sources said.
"All the heavy industries and construction companies from
"The Japanese banks want to be there...so they can fund these companies. If you step back further, there is also a strong political desire on the part of the Japanese leadership to have strong ties with Asean."
An executive at a large Japanese bank said his bank was looking to acquire a Philippine lender but added it had yet to narrow down any targets. He declined to be identified further. The planned law was also a topic of discussion between Aquino and Japanese Prime Minister
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