Phl Business Bank sets P4.25-B IPO

MANILA, Philippines - The thrift bank of the Yao family’s Zest-O Group is all set for a P4.25-billion initial public offering (IPO), the first in the country this year.

In a memorandum, the Philippine Stock Exchange (PSE) said it approved on Jan. 9 the application of Philippine Business Bank (PBB) to list up to 343.333 million shares in the bourse.

The thrift bank will sell 101.333 million common shares to investors at a maximum price of P41.94 per share for a total transaction value of P4.249 billion.

This will result in a 30-percent public float for PBB, which will have a market capitalization of P14.399 billion following the IPO.

“Most of the net proceeds of the offer, or approximately P3.61 billion, will be used to finance the bank’s lending activities and also, to a lesser extent, to fund the acquisition of investment securities,” the PSE noted.

About P400 million will be allotted “to finance capital expenditure requirements in connection with its branch network expansion program, including the acquisition of new branch banking licenses, the development and implementation of information technology infrastructure and applications projects.”

PBB earlier said it will raise fresh capital to open five new branches in Metro Manila early this year.

It will also open 10 provincial branches in areas like Zamboanga, Tuguegarao, Isabela, Davao and Leyte.

PBB hired First Metro Investment Corp. and SB Capital Investment Corp. as joint lead underwriters for the IPO.

Under the lender’s timeline, price setting for the IPO is scheduled on Feb. 4 prior to the Feb. 6-12 offer period.

Tentative listing date is on Feb. 19, PBB said.

PBB, controlled by the family of Amb. Alfredo M. Yao, was registered as Total Savings Bank in 1997. That same year, the company changed its name to PBB.

The Yao family also owns juice drinks firm Zest-O and budget carrier Zest Airways.

From its first branch in 1997, it has established 15 branches in Metro Manila and adjacent provinces in two years of operations.

The lender said it grew its network to a total of 72 branches as of end-June, of which 37 are located in Metro Manila and 35 in key urban locations in various provinces.

In the first half of last year, PBB recorded a total comprehensive income of P202.64 million, almost tripled the P82.97 million in the same period the prior year on the back of P823.4 million in interest income.