Asia United Bank is going to be the next banking establishment to debut on the Philippine Stock Exchange, having drawn up plans for an initial public offering (IPO) worth around $150 million by May this year.
AUB has mandated foreign banks UBS and Credit Suisse to arrange the maiden equity offering and is set to file within the next few days an application to register new securities at the Securities and Exchange Commission, banking sources privy to the offering told the Inquirer.
The 15-year-old medium-sized commercial bank plans to sell primary common shares to raise fresh funds as part of its bid to become a significant player in the Philippines.
Proceeds will beef up its capital ahead of the more stringent capital adequacy requirements under Basel 3, as well as fund an aggressive network expansion over the next three years.
AUB ended 2012 with 107 branches. It plans to double this distribution channel by 2015.
It plans to put up at least 45 more branches this year, 21 of which will be in the so-called restricted areas, including parts of Metro Manila.
The IPO size of around $150 million, which the bank plans to sell mostly to foreign investors, will bring to public hands at least 30 percent of post-IPO capital.
AUB is owned by a diverse group of Asian investors engaged in property development, manufacturing, and other equity ventures.
Republic Biscuit Corp. (Rebisco), the Philippines’ leading manufacturer, distributor, and exporter of snack food products for the past 49 years, is the biggest shareholder of the bank.
The bank plans to sell the bulk of its IPO shares to offshore investors to elevate its brand to a broader market, the sources said.
Industry sources said AUB had also filed an application at the Bangko Sentral ng Pilipinas last November to upgrade its license from regular commercial banking to universal banking. A unibank license will give the bank the authority to expand its businesses to non-allied undertakings but also requires a minimum public ownership of 10 percent, which the planned IPO will address.
In the last three years, AUB has also grown through acquisition. It bought the Rural Bank of Angeles, boosting its presence outside Metro Manila; Asiatrust Development Bank; and Cooperative Bank of Cavite. Part of the strategy is to aggressively build up its war chest to fund more acquisitions and widen its footprint nationwide.
Industry sources said Asia United Bank felt it had a good story to tell, and that it is a good time to tap the equities market given the robust performance of the Philippine stock market.
A strong demand for Philippine banking stocks—as proven by the good performance of the last two banks that debuted on the PSE—is seen to be supported by a generally upbeat view on the Philippine banking industry and the regulatory environment.
In the first nine months of 2012, AUB grew its net profit by 47.55 percent year-on-year to P1.04 billion, on track with its full-year bottomline target of P1.6 billion.
Total assets rose by 37 percent year-on-year to P62 billion. Return-on-equity ratio also went up to 14 percent from the 13.8 percent reported the same period last year. AUB now ranks among the most profitable commercial banks in the country.
Late last year, AUB rolled out an interactive mobile banking platform that offers what bank officials tout as “the most comprehensive” mobile tools made available by Philippine banks to date.
Beyond the standard features of allowing users to check account balances and view their transaction history, AUB’s mobile app brings unique offerings such as viewing the image of checks issued and monthly statements that can also be downloaded from mobile devices such as smartphones and tablet devices, top bank officials announced in a recent briefing.
Another “first” in local mobile app is the branch locator that enables the user to locate and call the nearest AUB branches with just a click. This feature is also available to AUB’s clients abroad who can locate and contact the bank’s foreign partners for remittance services.
The mobile app also seeks to bring AUB closer to its customers through the notification and messaging feature. Using iPhone’s push notification and alert feature, mobile app users can send and receive important messages from AUB and its branches.