American International Group Inc. (AIG) will sell its Philippine savings bank and auto financing company to East West Banking Corp., the banking arm of conglomerate Filinvest Development Corp. (FDC.PH), in a deal set for signing Friday, people in the banking industry said Thursday.

The people added that East West Bank is paying a 25% premium over the combined book value of the companies of PHP1.6 billion ($33.8 million).

Antonio Moncupa, president and chief executive of East West Bank, declined to comment on the deal, while AIG officials weren't immediately available.

Other parties that submitted bids are Banco De Oro, the Philippines' largest lender by assets, and Robinsons Savings Bank, a unit of conglomerate JG Summit Holdings.

AIG's Philippine savings bank, Philam Savings Bank, has nine branches, assets of PHP13.66 billion and a return on equity of 16.94% as of end-June 2008. Loans and receivables at the end of June 2008 stood at PHP10.4 billion.

Apart from the consumer units, AIG is also looking to sell its Philippine insurance business Philamlife, which has net worth of around $1 billion.

AIG is selling its assets to repay $85 billion of debt to the U.S. government.

-By Cecilia E. Yap and Cris Larano, Dow Jones Newswires; (632) 848-5051; cecilia.yap@dowjones.com

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