Aboitiz bank completes capital buildup

Aboitiz-led Union Bank of the Philippines has completed a P10-billion capital buildup program from the sale of new shares to existing shareholders.

Union Bank issued 158.8 million common shares or 15 percent of its outstanding shares prior to the offer at a price of P62.97 a share.

Eligible shareholders were entitled to buy 6.6644 new shares for every one share held as of Sept. 3.

The new shares that were issued from the stock rights offering were listed on the Philippine Stock Exchange on Friday.

The offer was “oversubscribed,” led by principal shareholders Aboitiz Equity Ventures, Social Security System and Insular Life Assurance Co Ltd., the bank disclosed to the Philippine Stock Exchange.

The offer further saw strong participation from retail investors, the bank said in the disclosure.

“The strong demand for the offer only shows how supportive our shareholders are of the bank’s strategic objectives. The proceeds give us a stronger capital base that supports our growth aspirations and provides buffer over higher capital requirements,” said Edwin Bautista, UnionBank president and chief executive officer.

Citigroup acted as sole global coordinator and international lead manager, while Amalgamated Investment Bancorporation served as domestic underwriter to the offer.

Proceeds from the offering will be used by Union Bank to fuel asset expansion and boost its capital adequacy ratios. The bank also plans to launch more innovations in the industry as it aims to be among the pioneers in the field of blockchain technology and the token economy.

Union Bank grew its first semester net profit by 8 percent year-on-year to P4.7 billion as higher interest earnings made up for the slack in securities trading and fee-based businesses.

For the six-month period, net revenues grew by 9.1 percent year-on-year to P12.7 billion.

Net interest income grew by 3.5 percent year-on-year to P8.35 billion given a double-digit growth of customer businesses.

The bank grew its loan book by 18 percent year-on-year to P313 billion at end-June, with retail loans accounting for 33 percent of total loan portfolio. This increase in earning assets boosted total resources by 12.8 percent year-on-year to P623.2 billion.

Its six-month performance translated to an annualized return on equity and return on average assets of 12.8 percent and 1.6 percent, respectively.