Effective Thursday, China Bank’s par value was reduced to P10 per share from P100 while its stock price was reduced to P47.85 per share from P478.80. The number of issued and listed outstanding shares was expanded by 10 times following a stock split transaction.
“This is to align par value with the rest of Philippine banks. All listed banks have a par value of P10 per share, except Metrobank at P20,” said China Bank spokesman Alex Escucha. “This gives an apple-to-apple comparison,” he added.
China Bank’s shares rose by 6.89 percent to close by P51.15 on Thursday after the change in par value took effect.
The issued and outstanding shares of China Bank expanded to 1.297 billion from 129.7 million. All of the bank’s issued shares are listed on the PSE.
As a result of the 10-for-one stock split of the common shares, the stock certificates will be released to the stockholders starting September 27.
Companies usually decide to increase the number of outstanding shares through a stock split when they deem that the share price was an outlier among their peers. This has no impact on the fundamental valuation of the company.