PSE Circular for Brokers No. 1077-99

May 13, 1999 PSE CIRCULAR FOR BROKERS NO. 1077-99 May 12, 1999 Philippine Stock Exchange, Inc. PSE Center, Exchange road Ortigas Center, Pasig City Attention: Ms . Grace B . de Guia Asst . Manager Disclosure Dept . RE : Your Fax message of 12 May 1999 Gentlemen : The Company has no knowledge that it has been acquired by Bank of Commerce. LLjur Very truly yours, METROPOLITAN INSURANCE COMPANY (SGD.) R. L. ABAD Exec . Vice President Bank of Commerce plans IPO By TED P. TORRES The Bank of Commerce will go public by year 2000 even as it expressed interest in acquiring another commercial bank this year. The bank is already undertaking massive studies on the public listing at the Philippine Stock Exchange (PSE) as well as making the necessary representation with the Bangko Sentral ng Pilipinas (BSP) and the Securities and Exchange Commission (SEC). Turning public will open the bank to various investment and business options including prospects of entering into strategic partnerships with foreign financial institutions. Initially, it may open 20 percent ownership to the public. The bank is presently looking at the domestic market for its business and investment opportunities. "We are always open to an acquisition of another bank," Raul de Mesa, Bank of Commerce president and chief executive officer told the STAR . It was also made clear that an acquisition should result in the Bank of Commerce coming out as the surviving entity. De mesa added that the bank for acquisition must be able to compliment Bank of Commerce's thrust of expanding its corporate and retail market including reaching geographical areas through its existing or potential branch network. Although he did not name specified existing commercial banks, the bank official implied that they were interested in a medium to large sized bank. "We are looking at a bigger spread in the corporate clientele rather than the retail side as most banks are doing. However, we will continue to offer housing loans on the retail side." The bank is presently in the process of finalizing the technicalities of its acquisition of Traders Royal Bank. When the acquisition of the said bank is completed, the branch network of the Bank of Commerce will reach a little over a hundred. De Mesa said that the bank will be infusing an additional P400 million by June this year. Another capital infusion will be executed before the end of the year but for a larger amount. The bank is looking at a net income of P240 million this year from P15 million in 1998 and P168 million in 1997. "The target is not sudden. The normal income of a bank should be about P150 million. So looking at P240 million that is an incremental of P90 million principal driven from volume increases on the funding side, and a reduction of our spreads as we are looking at different outlook of our loan portfolio," the bank president said. The Bank of Commerce has US dollar deposits amounting to $50 million, and local currency deposits of approximately P7.4 billion as of April this year. cdll It has no plans to acquiring an expanded commercial bank or universal bank (Unibank) license even if its capital base is expected to reach P5 billion within the year. The BSP requires a minimum capitalization of P4.5 billion for unibanks. Recently, Bank of Commerce acquired the Metropolitan Insurance Corp., a non-life insurance company for approximately P150 million. It is also involved in the life insurance industry through CAP Life Insurance, and the stock market through Litonjua Securities Inc. The family of Ramon Cojuangco Sr, Through BOC Holdings Corp. owns 26 percent of the bank while Antonio Cojuangco Jr. in a personal capacity owns 26 percent. CAP Life controls 30 percent while the banks management groups now owns 18 percent.