After securing approval from its board of directors, Philippine National Bank (PNB) will now need the approval of the Bangko Sentral ng Pilipinas to be proceed with its plan to infuse P10 billion in fresh capital to Allied Savings Bank.
“The board of directors of the Philippine National Bank during its meeting today [Friday] approved and confirmed the investment/infusion of additional equity in Allied Savings Bank amounting to P10 billion,” PNB told the local bourse also on Friday.
However, PNB specified that the transaction is still subject to the approval of the BSP. No further details were provided.
On Wednesday, the board of the Philippine Stock Exchange approved the application of PNB to list additional 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 have an estimated gross offer proceeds of up to 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 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 bank added.