BDO readies expansion with stock dividend, capital boost

BDO Unibank Inc. (BDO), the country’s biggest lender, plans to declare a 20 percent stock dividend after announcing a major capital increase to rapidly expand its business and make new investments.

BDO, part of the Sy family’s SM Group, said its board approved the expansion of its authorized capital by over 50 percent to 8.5 billion shares.

The additional shares from the stock dividends will also be eligible for future cash dividends. Record and payment dates of the stock dividends shall be fixed and disclosed after approval by the Bangko Sentral ng Pilipinas.

The capital increase helps position the lender to capture “rapid organic growth” and possible acquisitions and investments.

“This will allow BDO to continue to expand its business, strengthen its franchise, and deliver quality earnings to position the bank for long-term sustainable growth,” it added.

BDO said the stock dividend was also advantageous to shareholders.

“Shareholders will gain additional shares which they can keep for the long-haul and grow in value, or in case they need liquidity, sell through the stock market at their discretion,” it said.

BDO separately announced plans to expand the capital of its rural banking arm, BDO Network Bank (BDONB), by as much as P2 billion.

The money would be used to support salary loans and lending activities to micro small and medium enterprises.

“Further, this will enhance BDONB’s ability to cover and serve more markets, particularly the unbanked and the underserved segments of the population,” BDO said.

BDONB’s major shareholders—BDO, with an 85 percent stake, and Osmanthus Investment Holdings Pte. Ltd, with a 15 percent stake—have committed to participate in the capital-raising activity up to their proportionate shares.

BDO said capital-raising plan will be subject to regulatory approvals. INQ