BPI plans P50B stock rights offer

Ayala-led Bank of the Philippine Islands plans to raise as much as P50 billion from the sale of new shares to existing shareholders, beefing up its war chest to fund both organic growth and prepare for potential acquisitions.

BPI has obtained approval from its board to conduct a stock rights offering equivalent to as much as 567 million new shares, the bank disclosed to the Philippine Stock Exchange on Wednesday.

“Our planned stock rights offer is a vote of confidence in our country, our clients, and ourselves. The economic landscape will continue to change for the better in the next five years. We want to contribute to and benefit from that change,” BPI president and chief executive officer Cezar Consing said in a press statement.

BPI bank believes that the Philippine banking sector continues to present significant growth prospects in the short to medium term and that it is well-positioned to capitalize on them.

As such, BPI said it’s conducting this stock rights offering to support growth and strategic initiatives, such as growing and strengthening businesses and core franchises through the expansion of lending book to consumers, small and medium enterprises (SMEs) and micro-finance segments. Thus, the bank seeks to “capture the positive momentum in the Philippine economy.”

The bank also plans to invest further in distribution channels, seeking to improve both efficiency and client coverage via digitization and electronic channels and bank branches.

Southeast Asia’s oldest bank also cited the need to be ready to consider “inorganic growth opportunities if and when they arise.”

The final terms including the issue size, entitlement ratio, offer price, record date and appointment of arrangers have been delegated to BPI’s management.

“The bank expects the rights issue to enhance its competitive differentiation versus its peers in the market as it seeks to capitalize on opportunities in the banking sector,” the bank added.

In line with its capital call, the bank’s board approved an increase in its authorized capital to 7 billion shares from 4.9 billion.