SEC okays PBCom‘s P3-B capital hike

The Securities and Exchange Commission has approved the capital increase of Philippine Bank of Communications (PBCom) from P14.5 billion to P17.5 billion.

Among those who subscribed to the P3 billion increase are the International Copra Export Corp. (P1.2 billion), Ralph Nubla Jr. (P938.1 million), Telengtan Brothers & Sons Inc. (P685.62 million), and La Suerte Workers Cooperative Fund (P176.4 million).

Of the company’s total capitalization, P8.26 billion has been subscribed and paid.

Pbcom focuses on its strong middle to high-end Filipino-Chinese market clientele, expanding into the wholesale banking mortgage market with its higher yield and stable housing portfolio. It also has strong and stable trust banking business.

It earlier signed a P7.6-billion financial assistance deal with state-run Philippine Deposit Insurance Corp. (PDIC) which entailed the establishment of a special purpose asset vehicle through which PBCom’s non-performing assets will be sold.

The PDIC assistance provided the bank support to cover losses arising from the sale of idle assets at substantial discounts of as much as 80 percent of their market value.

The loan’s annual interest rate is at one percent over a 10-year period.

As part of its continuing drive to clean-up its balance sheet and strengthen its financial position, PBCom completed in October 2004 the sale of P12.2-billion worth of non-performing assets (NPAs) to special purpose vehicle Unimark Investments Corp.

The move was taken by the company to ensure sustained growth and profitability moving forward.

PBCom was incorporated on in 1939 as one of the earliest non-American foreign banks in the country. It received the authority to engage in commercial banking from the then Bureau of Banking of the Department of Finance under the Philippine Commonwealth, with a capitalization of P2 million

Over the years, PBCom posted consistent growth with resources and capital reaching P57.7 billion and P9.3 billion, respectively, as of end-2004.