PSE Circular for Brokers No. 1992-99

August 11, 1999 PSE CIRCULAR FOR BROKERS NO. 1992-99 August 9, 1999 SECURITIES AND EXCHANGE COMMISSION SEC FORM 11-C CURRENT REPORT UNDER SECTION 11 OF THE REVISED SECURITIES ACT (RSA) AND RSA RULE 11 (a)-1(b)(3) THEREUNDER 1. August 9, 1999 Date of Report (Date of earliest event reported) 2. SEC Identification No. 5830 3. BIR Tax Identification No. 00488574 4. THE PHILIPPINE BANKING CORPORATION (PHILBANK) Exact Name of Registrant as specified in its charter 5. Manila, Philippines 6. ______ SEC Use Only) Province, country or other jurisdiction Industry Classification Code on incorporation 7. 6778 Philbank Bldg., Ayala Avenue, Makati City 1226 Address of principal office Postal Code 8. 817-09-01 to 28 and 817-11-67 Registrant's telephone number, including area code 9. Not Applicable Former name of former address, if changed since last report 10. Securities registered pursuant to Sections 4 and 8 of the RSA Title of Each Class Number of Shares of Common Stock Outstanding and Amount of Debt Outstanding Common Stock 28,726,132 11. Indicate the item numbers reported herein: Item No. 9 MERGER OF PHILBANK AND GLOBAL BUSINESS BANK The Philippine Banking Corporation (Philbank) and Global Business Bank (Global Bank) have been directed by their shareholders to immediately start working on the details, the terms and conditions for the merger of the two commercial banks. Mutual due diligence will immediately commence and once all necessary approvals and consents have been obtained, the parties will finalize the articles of merger. Global Bank is a member of the MetroBank Group, the country's largest universal bank. It was established in 1997 under a joint venture agreement with Tokai Bank of Japan. Philbank, on the other hand, is a 64 year old commercial bank listed in the Philippine Stock Exchange and is owned by the Siy Yaps, Chuas and Gaisanos. cdpr The shareholders of both institutions believe the merger will create synergies and business complementation. With the ongoing consolidation in the local banking sector, the merged bank should gain competitive edge with a stronger combined capital of about Php 5.5 billion, a larger asset base of Php22 billion and a more extensive network of 78 branches all over the Philippines. Once completed, the merged bank will rank in the top 15 in terms of capital and 25 in total assets among the country's banks. Upon proper application with the Monetary Board, Mr. Antonio S. Abacan, President of the Metropolitan Bank and Trust Co. (Metrobank), received written notice on August 3, 1999 that the acquisition by Metrobank of 60% of the equity of Philbank was duly approved through the Monetary Board's Resolution No. 1084. Metrobank is also the majority owner of Global Bank with which Philbank will be merged. The Monetary Board approval is subject to the following conditions: 1. The proposed merger of Philbanking and GBB shall be completed not later than December 31, 1999, 2. The Bank's equity investment in the subsisting bank after the merger of Philbanking and GBB shall not exceed 60% of the voting stock of the subsisting bank; 3. The equity investment of the Bank in any single enterprise, whether allied or non-allied, shall not at any time exceed fifteen (15%) of its net worth; 4. The total amount of investment in equities made by the Bank in all enterprises, whether allied or non-allied, shall not exceed fifty percent (50%) of its net worth; and 5. There shall be no concurrent directorship and/or officership between the bank and its subsidiary except as may be authorized by the BSP. At present Global Bank and Philbank are engaged in pre-integration activities prior to their formal corporate merger. Pursuant to the requirements of the Revised Securities Act, the registrant has duly caused this report to be signed in its behalf by the undersigned hereunto duly authorized. THE PHILIPPINE BANKING CORPORATION Registrant (SGD.) RENATO J. FERNANDEZ Corporate Secretary & General Counsel