The SM Group’s Banco de Oro Unibank, one of the country’s largest banks, is asking the Bangko Sentral ng Pilipinas (BSP) for funds of up to P12 billion to finance acquisition plans.

These funds, which are highly concessional loans, are extended by the BSP for banks wanting to buy or takeover another financial institution. On official documents, BSP refers to these loans as “income support.”

Sources have confirmed the proposal which have yet to be presented officially to the BSP’s seven-person Monetary Board for deliberation and eventual approval.

BDO is getting ready to buy mid-size Export and Industry Bank (Exportbank) for an undisclosed amount.

Exportbank has been given until October 30 to raise P3.3 billion as fresh capital but it has failed to do so. The BSP has extended and re-extended the bank’s authority to issue tier 1 capital three times since July.

Sources said the BSP has been encouraging banks the most active is BDO “to acquire or merge with other banks so that no financial institution or commercial bank during the watch of incumbent central bank governor Amando M. Tetangco Jr. will be closed down. The BSP however, has shut down the operations of some 200 rural banks in the last five years.

The 650-branch BDO, with a reported total assets of P743.49 billion and capital of P56.02 billion as of September, has been acquiring banks since the early 2000. Its last acquisition was GE Money Bank and its largest so far was Equitable PCI Bank.

Besides Exportbank, BDO is also looking to acquire Philippine Bank of Communications.

Last week, the board of directors of Exportbank has approved the sale of its core banking assets including liabilities.

BSP sources said Exportbank is willing to sell all its 50 branches but are intending to keep its banking license. Assets for sale will also not include its thrift bank, EIB Savings.

Exportbank, which acquired Urban Bank in 2001, is owned by Hong Kong-based Lippo Group through Lippo China Resources Ltd., Raiffeisen Zentralbank sterreich AG (RZB Group), American Orient Capital Partners and local firm Yao Group of Ambassador Alfredo Macam Yao.

As of September, BDO posted a net loss of P1.3 billion due to Lehman Brothers-related loan provisions.