Philippine Business Bank plans to raise P3B from IPO

Image from PBB website

MANILA, Philippines–Philippine Business Bank, the thrift banking arm of the Zest-O group, plans to raise P3 billion from an initial public offering late this year or in early 2013.

In an interview last week, PBB president Roland Avante said the bank was looking to offer 20-30 percent of its shares to the public, thus beefing up fresh funds for expansion. The offer will comprise only primary shares, which means that all proceeds would be plowed into the bank.

“It’s really more as a strategic move to be able to maybe expand business further and then, (raise funds) as an added ammunition. We’re building a war chest for possible acquisition and investments in the horizon of over two to three years if there will be a license upgrade,” Avante said.

PBB chair Alfredo Yao had previously said if the thrift bank were to upgrade its banking license, it would go for universal banking than regular commercial banking operations.

“We’re preparing ourselves to be ready to go and issue if there’s right timing. We might also consider other options,” Avante said, adding that the IPO may happen in the last quarter of this year or within the first half of 2013.

He said PBB was in talks with prospective underwriters such as ATR Kim Eng Capital and First Metro Investment Corp.

Boosting capital is less of a motivation for PBB compared to business expansion. “Capitalization-wise, we’re still under-leveraged, still overcapitalized,” Avante said, noting that capital adequacy ratio was close to 20 percent.

PBB currently operates on a 71-branch network while additional 14 branches will be opened in the next six to nine months, Avante said.

But if PBB can’t pursue an IPO, getting new investor through a private placement is also a possibility, Avante said.

PBB is part of Yao’s Zest-O group which also includes the beverage unit Zest-O Corp. and budget carrier Zest Air.