The local bourse has separately approved the stock rights offer of two listed banks, Bank of the Philippine Islands (BPI) and Philippine National Bank (PNB), ranging from P15 billion up to P25 billion.
A memorandum filed by the Philippine Stock Exchange showed on Wednesday that the board of directors of the local bourse has approved the application of BPI for the additional listing of up to 395 million common shares with a par value of P10 a share to cover its stock rights offering to all stockholders of record as of January 16, 2014.
The offer, which has estimated gross proceeds of up to P25 billion, is expected to strengthen BPI’s positioning to support critical strategic growth initiatives such as loan growth.
“The bank also proactively evaluated its capital in light of its business strategy and determined the offer would strengthen its core Tier 1 [equity], further solidifying the bank’s capital adequacy and financial strength in light of the implementation of Basel III,” BPI informed the local bourse.
Also, the offer is expected to help BPI broaden and increase its retail channels, as well as invest in and enhance its corporate banking and investment banking capabilities.
“In terms of specific application, the bank expects that the net proceeds will be initially reinvested in investments allowed under BSP [Bangko Sentral ng Pilipinas] regulations but will eventually be reinvested in loans to be disbursed within a period of 18 to 24 months,” BPI further said.
The offer period for the additional stock rights will be from January 20, 2014, to January 30, 2014, while the tentative listing date at the PSE will be on February 10, 2014.
In another memorandum, the PSE board also separately approved the application of PNB for the additional listing of up to 163 million common shares with a par value of P40 a share to cover its stock rights offering to all stockholders of record as of January 16, 2014.
The offer, which will raise an estimated P15 billion, will be used by the bank to build and refocus on its consumer lending business through capital infusions into Allied Savings Bank, a wholly owned subsidiary of PNB.
PNB will also partly use the proceeds from the offer to further strengthen its capital ratios under the Basel III standards, which are to become effective on January 1, 2014, as well as mitigate the reduction in its capital adequacy ratio once certain that its Tier 2 capital instruments become ineligible as capital by December 31, 2015, in accordance with BSP Circular 781.
“[The offer will also be utilized] to support the bank’s asset growth in 2014 and in subsequent years,” the Lucio Tan-led bank also said.
The offer period for the stock rights will be from January 27, 2014, until February 3, 2014, while the tentative listing date has been set on February 11, 2014.