Asia United hopes to make it on list of top 10 banks

Asia United Bank, which is set to go public next month, aims to triple its size and join the roster of the country’s top 10 banks within the next five years.

In a briefing on Thursday, the bank said it had set an indicative price range of P80 to P110 per share for its initial public offering. This suggests that the bank is aiming at raising P7 billion to P9.68 billion from the offering, including the over-allotment provision.

AUB first vice president Andrew Yap yesterday said in an investors’ briefing that this offering was “the (investors’) last chance to own a stake in a major bank.”

He noted that this bank was comparable to Security Bank 10 years ago.

Yap said the bank was pursuing the initial public offering to comply with the requirement for the upgrade of its status from commercial to universal bank, to elevate its profile and to pursue growth aspirations.

Part of the plan is to expand the bank’s branch network.  AUB currently has 54 branch licenses in restricted areas in Metro Manila. The plan is to build a network of at least 250 branches in five years from 107 branches at present.

AUB does not expect to declare dividends in the next three to four years, being on a growth mode. “Since we started, no cash dividend has been paid … What you won’t get in cash, you’ll get in increase in value of shares,” AUB president Abraham Co said.

Ramon Sy, the bank’s vice chair, said: “We want to be among the top 10 banks within the next five years.”

AUB expects to finalize the pricing of its IPO by May 2.

The domestic offer period will run from May 7 to 14 while the listing on PSE was set for May 17.

The bank is offering up to 88 million primary common shares, with the base offer consisting of 80 million shares while additional eight million shares were set aside for over-allotment.

UBS AG Kong Kong branch and Credit Suisse (Singapore) Ltd. have been mandated as the joint bookrunners and joint lead managers for this offering. Mandated as sole global coordinator is UBS AG.

Named local IPO underwriters were First Metro Investment Corp. and BDO Capital and Investment Corp., Co said.

AUB said the proceeds from the listing would be used for possible acquisitions, the purchase of bank branch licenses in restricted areas, branch network expansion, information technology infrastructure investments and general corporate purposes.

This exercise is also seen allowing the bank to beef up its capitalization and further strengthen its position in preparation for stringent capital adequacy requirements under Basel III international guidelines.