I.

Alternative Courses of Action

1. Merger of Equitable PCI Bank and BDO which resulted to Banco de Oro Unibank,
Inc.

Advantages:
The merger would lead to a creation of the largest bank and in time
would become 1st on the list.
serve its customers better and more efficiently than either institution
alone
Equitable PCIs debt rating could rise.
Increase capital adequacy ratio (CAR) without having to raise more
capital.
Wider network and international links as the merger would attract
many investors.
Potential increase of the market share and the fair market value of the
bank.
Will be better able to upgrade its risk management and IT systems in
order to address Basel II requirements.
Would lead to a creation of a stronger and more profitable bank and
would contribute greatly to the economy.

Disadvantages:
Problems in the transition would definitely occur.
Conflict of interest between the top management of the two banks.
It would trigger waves of mergers and acquisitions that would result
into oligopoly in the banking industry and would create legal disputes
among its competitors.
Banco de Oro would become the surviving entity thereby deleting the
name of Equitable PCI bank in the banking industry.
The plan was controversial in terms that a smaller bank could not
possibly acquire a bank much larger than it is. At the time of the
merger, Equitable PCI had three times the capital Banco de Oro had.