“We have been getting some queries from the media if EastWest Bank (EW) is set to be acquired by another bank is true. No, it is not true. Filinvest Development Corp. (FDC) is not in any discussion nor does it plan to, with regards to any potential sale of EastWest Bank,” FDC CEO Josephine Gotianun-Yap said, denying the swirling rumors that its bank was going to be bought by another bank.
There has been some speculation from media and netizens referencing how a certain bank was in talks of merging with or acquiring the FDC subsidiary. “EastWest Bank is one of the pillars of FDC,” said Gotianun-Yap. “We remain very positive with its consistent high performance and we believe it is well positioned to continue to grow and sustain its track record of being among the most profitable listed universal banks in the industry.”
FDC, the controlling stockholder of EW, is one of the country’s biggest business conglomerates. And for the conglomerate to let go of a highly profitable business just does not make any business sense.
“We are poised for another record year of profits,” according to EW CEO Antonio C. Moncupa Jr. With inflation under control and the BSP ensuring adequate market liquidity, interest rates had gone lower. The lower rates magnified EW’s advantage from being business and consumer focused, and further enhanced its margins. Together with its improving deposit structure from the growth of lower-cost current and savings accounts, the Bank is looking forward to sustaining its top position in profitability.
For the last three years, EW has ranked an impressive No. 1, No. 2, and No. 3 profitability position in the banking industry in terms of Return on Average Equity (ROAE) from 2017, 2018, and 2019, respectively. And, in the first quarter of 2020, EW went back to being No. 1 as the most profitable listed universal bank in the industry in terms of ROAE. EW’s record numbers were due to the “fruits of the seeds it has planted in the last few years, including improving economies of scale as the Bank has grown and its branches have started to mature, better trading gains, lower interest rates, and better deposit structure with the increase in current and savings account deposits,” said Moncupa.
“In the last few years, there have been a number of queries, both from local and international entities, if EW is open to take new investors. I guess some sectors are attracted to EW’s unique business model and consistent high profitability record. But, no. We think that our stockholders will be better served if EW first optimized its potential as an independent company.” Moncupa also added.