The Philippine Stock Exchange has approved a plan by the country’s leading lender BDO Unibank Inc. to raise as much as P60 billion in fresh capital by selling new shares to existing shareholders early next year.
The fresh capital would “support BDO’s medium-term growth objectives amid the country’s favorable macroeconomic prospects and provide a comfortable buffer over higher capital requirements with the forthcoming imposition of the ‘domestic systemically important bank’ (DSIB) surcharge,” the bank said in a disclosure on Friday.
BDO’s stock rights offering will run from Jan. 16 to 24 next year. Eligible to subscribe are shareholders as of record date Jan. 10, 2017.
Listing date on the PSE is tentatively set for Jan. 31 next year.
BDO’s parent conglomerate SM Investments Corp. has fully supported the stock rights offering and committed to subscribe to shares not taken up by minority shareholders.
The Bangko Sentral ng Pilipinas (BSP) has classified banks depending on the extent of their systemic importance using predefined indicators for size, interconnectedness, substitutability and market reliance as a financial market infrastructure as well as complexity. The higher bar for big banks like BDO in terms of capital requirement and supervisory expectations is intended to strengthen the financial system by lowering the probability of systemic bank failures.