Singapore based DBS Group Holdings has agreed to dispose 10.4% interest in the Bank of the Philippine Islands (BPI) to its parent company Ayala for SGD757.3m ($620.4m) in cash.
The consideration represents a 2.7 times multiple to the latest consolidated book value of PHP25.6 per BPI share as at 30 June 2012 and a discount of nearly 9.8% to the three month volume-weighted average price per share.
The divestment, which offers SGD450m ($368.58m) as capital gain for the bank, is in line with its disciplined capital management and strengthens its capital position ahead of Basel III regulation, the bank said.
Basel III has been developed by the Basel Committee on Banking Supervision, to strengthen the regulation, supervision and risk management of the banking sector.
Currently the bank owns 20.3% shareholdings in BPI, and following the sale of aforesaid holding, the Singapore bank will hold 9.9% in the bank.
DBS manages more than 200 branches across 15 markets and serves over four million customers through consumer, SME and corporate banking activities across Asia and the Middle East.