City Savings Bank, the thrift banking unit of Aboitiz-led UnionBank of the Philippines (UnionBank), has agreed to acquire Philippine Resources Savings Banking Corp (PR Savings) from the Ropali Group.

Union Bank believes that the deal will enable its subsidiary City Savings to expand footprint in Luzon, and foray into new market segments, including as motorcycle and agri-machinery financing.

The deal involves the purchase of 127.72 million shares held by the Ropali Group, which represent 66.27% of the total outstanding capital stock of PR Savings Bank.

UnionBank president and CEO Edwin Bautista said: “This acquisition will expand our mass market reach, consistent with our vision to promote inclusive growth in the country.”

The transaction value is less than 10% of the total book value of Union Bank.

Subject to regulatory approvals from the Philippine Competition Commission and Bangko Sentral ng Pilipinas, the transaction is likely to be completed by the second quarter of 2018.

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The proposed acquisition is in line with efforts of the Bangko Sentral ng Pilipinas to boost financial inclusion and strengthen the banking industry through mergers and consolidation.