BPI completes P25-B capital hike
PHOTO courtesy of BPI
MANILA, Philippines–Ayala-led Bank of the Philippine Islands has completed a P25-billion capital build-up program through a stock rights offer, preparing itself for growth amid a regime of tighter capital adequacy requirements.
This equity deal boosts BPI’s core or tier 1 capital adequacy ratio from 14.7 percent to 18.6 percent of risk assets, cementing its place as one of the Philippines’ most well-capitalized banks.
The rights offer recently completed by BPI also marked the largest capital market transaction done by the bank in its 162-year history, the bank said in a press statement.
The new shares will be listed on the local stock exchange on Feb. 10.
“This transaction is about confidence on the part of our shareholders on the growth prospects of our country, our clients, and our bank. We are grateful for their overwhelming vote of confidence in the bank’s ability to execute on its growth strategy,” BPI president Cezar Consing said.
BPI sold 370.37 million new common shares to existing shareholders at P67.50 per share. Shareholders who subscribed to the offering got one new share for every 9.602 existing common shares held.
The bank reported “very strong support” from BPI shareholders, both domestic and foreign, with 99 percent take-up and over P33.5 billion of subscriptions. A significant majority of shareholders applied to subscribe to more than their pro-rata share in the rights offer, the bank said.
The bank’s major shareholders Ayala Corp. and Ayala DBS Holdings Inc. (a company held by Ayala Corp. and Government of Singapore Investment Corp.) subscribed to the rights offer.
BPI Capital Corp. was the sole global coordinator as well as sole domestic bookrunner and domestic underwriter for the rights offer. Goldman Sachs and J.P. Morgan acted as joint international bookrunners and underwriters.
For this year, BPI expects net profit to climb to a new record high level of P20.21 billion, about a tenth higher than the expected bottom-line of P18.4 billion for 2013.
Based on the bank’s projections submitted in line with this stock rights offering, the increase in profits this 2014 would likely be supported by a 22-percent expansion in loan book and an 18-percent rise in deposit base.
Return on average equity this year is expected to moderate to 15 percent and return on assets at 1.75 percent.
