The Philippine Stock Exchange has approved the stock rights offer of China Banking Corp. worth P8 billion, as the bank prepares to operate in an environment marked by more stringent capital adequacy requirements.
China Bank, which is embarking on a stock rights offering for the first time since 1996, was given the go-signal to sell as much as 275 million common shares to existing shareholders. The offer price per share is yet to be determined.
The offering will run from April 30 to May 7 this year with Citicorp Capital Philippines Inc. as lead underwriter.
The bank is conducting a regional roadshow starting in Singapore today, to be followed by another set of investor briefings in Hong Kong.
China Bank has mandated Citigroup and JP Morgan as joint global coordinators, lead managers and underwriters, the bank said in a disclosure to the Philippine Stock Exchange Monday.
The bank, which is led by the sons of tycoon Henry Sy, is also recapitalizing its thrift unit China Bank Savings through a capital infusion of up to P800 million in tranches.
The additional capital will enable Chinabank to pursue growth strategies while ensuring that its capital adequacy levels remain above the new Basel 3 requirements, particularly in light of the recent acquisition of Planters Development Bank.
Since the start of the year, the Bangko Sentral ng Pilipinas has required universal and commercial banks in the country to adopt the capital adequacy standards under Basel 3—a complex package of reforms designed to improve the ability of banks to absorb losses.
China Bank is part of SM Investments Corp., which runs the biggest banking, property and retail enterprises in the country. Doris C. Dumlao