Davao City, Philippines, TPG Growth, the middle market and growth equity investment platform of TPG, announced an agreement with BDO Unibank, Inc., to acquire a 40 percent stake in One Network Bank (ONB).
Based in Davao City, ONB is the rural bank subsidiary of BDO, with more than 100 branches and offices mostly in Mindanao. Following the transaction, BDO will retain approximately 60 percent ownership in ONB.
According to Mindanation’s banking analysts, the deal is going to be good for the country, particularly rural Mindanao, since TPG’s expertise lies in “impact investing” and providing banking services to the “underbanked or unbanked population of Philippines.”
This is TPG’s second, currently active venture in the Philippines after its 2014 investment in 8990 Holdings. Its entry into ONB is seen as a long-term commitment and is a reflection of its confidence in the Philippine economy under the Duterte administration.
Prior this deal with ONB, TPG had been successful in using its expertise in financial services and developing markets in Indonesia, where it was able to expand Bank Tabungan Pensiunan Nasional (BTPN)’s microfinance business from 48 branches in 2008 to more than 550 branches today.
“We look forward to working with TPG to accelerate ONB’s expansion and to develop new products to cover the underserved market segments.” said Nestor V. Tan, President and CEO of BDO. “Through this partnership, ONB will benefit from TPG’s global experience in financial services, especially in developing markets.”
This new phase of ONB’s growth is aligned with the Bangko Sentral ng Pilipinas’s (BSP) efforts to improve financial inclusion in the country. BDO is the market leader in the domestic banking industry with strong brand recognition, a solid balance sheet, and the country’s largest branch and ATM network.
Across its platform, TPG has invested in a wide variety of financial services companies throughout Asia, including Indonesian financial institution BFI; Janalakshmi, India’s largest microfinance institution; the Shenzhen Development Bank in China; and Union Bank of Colombo in Sri Lanka.
“TPG has worked with many highly impactful financial services businesses across Asia. Our insight in the sector has come from years of identifying and developing the full potential of strong businesses,” said Ganen Sarvananthan, Head of TPG Southeast 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.”
The transaction is subject to closing conditions and regulatory approval.
BDO is a full-service universal bank that provides a wide range of corporate and retail banking services, including traditional loan and deposit products as well as treasury, trust banking, investment banking, private banking, rural banking, cash management, leasing and finance, remittance, insurance, retail cash cards, and credit card services.
BDO has one of the largest distribution networks in the Philippines, with more than 1,000 operating branches and over 3,000 ATMs nationwide. It also has a branch in Hong Kong as well as 26 overseas remittance and representative offices in Asia, Europe, North America, and the Middle East.
BDO ranked as the Philippines’ largest bank in terms of total assets, loans, deposits, capital, and trust funds under management based on published statements of condition as of March 31, 2016. For more information, please visit www.bdo.com.ph.
About TPG Growth
TPG Growth is the middle market and growth equity investment platform of TPG, the global private investment firm. With over $7 billion of assets under management, TPG Growth targets investments in a broad range of industries and geographies. TPG Growth has the deep sector knowledge, operational resources, and global experience to drive value creation and help companies reach their full potential. The firm is backed by the resources of TPG, which has approximately $70 billion of assets under management. TPG Growth’s current and past investments include Airbnb, Apollo Towers, Cancer Treatment Services International, e.l.f. Cosmetics, NorthStar Anesthesia, Novolex, Schiff Nutrition, SuccessFactors, SurveyMonkey, and Uber. TPG Growth has offices in China, India, London, Singapore, Turkey, and the United States. For more information, visit www.tpg.com.