Metropolitan Bank and Trust Co. (Metrobank) has secured the approval of Bangko Sentral ng Pilipinas (BSP) to double its capital as it gears up for the firmer capital adequacy requirement under the Basel 3 framework.
In a filing with the Philippine Stock Exchange, Metrobank disclosed that it has received the BSP’s go signal for its move to hike its capital from P50 billion to P100 billion, divided into 4 billion common shares and 1 billion preferred shares, each with a par value of P20 a share.
According to Metrobank, the proposed increase in authorized capital stock gives the bank flexibility to issue Basel 3 compliant Tier-2 notes in the future.
The bank earlier cited that the Basel 3 guidelines issued by the BSP requires that Tier-2 notes have a provision for the instrument to either be written off or converted to common equity upon occurrence of certain trigger events.
“The BSP further stipulates that banks must make necessary amendments to its articles of incorporation to accommodate such conversion,” Metrobank added
Metrobank further said that the BSP nod on its capital increase is still subject to approval of the Securities and Exchange Commission.
Earlier in March, the board of directors of Metrobank approved the company’s plan to amend its by-laws in order to increase its capital.
Based on audited financial statement at the end of 2012, the company reported total equity of P120 billion and total capital adequacy ratio (CAR) of 16.3 percent with Tier 1 CAR at 13.7 percent.
Moreover, Metrobank increased its income up by 163 percent to P11.4 billion during the first quarter of this year on steady growth in revenue and robust expansion in treasury and investment activities.