CIMB Group, the Malaysian financial services firm, has acquired a majority stake in a Philippine Bank as part of its expansion strategy.

A conditional share purchase agreement has been entered to acquire a 60 per cent stake in Bank of Commerce, owned by San Miguel Properties, San Miguel Corporation Retirement Plan and various minority shareholders. The acquisition values the bank at Php181.25 per share or Php12,203 million ($287 million), which will be settled in cash, CIMB said in a statement. The price is 1.14x the 31 December 2011 value of BoC, but upon full alignment, the effective price to book is expected to be around 1.30x.

Bank of Commerce is a major bank in the Philippines with a 122-branch network across the country. It offers a range of banking services, including traditional deposits, corporate banking, consumer banking, asset management, trust services and treasury. 

The takeover effectively increases CIMB Group's retail network to 1,239 full branches. The company records a market capitalisation of RM55.3 billion ($18 billion) as of 31 December.

The acquisition in the Philippines is in line with the Malaysian bank's long-term growth strategy, given that the average annual real GDP growth in the country has steadied at around 4.9 per cent in the past decade.

"This, together with the stabilising political situation and pro-business administration... the Philippines has the potential of becoming very important to us," said Dato Sri Nazir Razak, group chief executive of CIMB Group.

The proposed acquisition will not have any material effect on CIMB's earnings for the financial year to 2012 or its share capital.