MANILA, Philippines - Ayala-owned Bank of Philippine Islands (BPI) has vowed to aggressively intensify expansion efforts to support its net income growth target of about 20 percent this year, a top bank official said yesterday.
At a press conference after the listing of the bank’s P25 billion worth of shares at the Philippine Stock Exchange, BPI president and CEO Cesar Consing said most of their efforts for 2014 would be geared toward expanding their business operations.
In 2013, BPI’s net income rose 15 percent to P18.8 billion from P16.3 billion earnings in 2012.
Consing said they plan to hire more people, improve their technology, and renovate and build more branches this year.
He said they intend to almost double the number of their workforce to 2,500 from the present 1,300.
The bank will continue to carry out its branch network upgrade and expansion as it plans to renovate 40-50 old branches, with renovation cost of at least P5 million to P10 million each branch.
According to Consing, they are quite comfortable with the level of their capitalization and most likely not engage in any capital raising activities in the near future.
“It is unlikely that we will raise (more capital). We have room to grow in three to five years,†the bank executive said.
BPI has successfully raised some P25 billion from the issuance of 370.37 million common shares (ratio of 1:9.602 common shares held or 10.4 percent of outstanding shares) at P67.50 per share.
The stock rights offer received strong support from its shareholders, both domestic and foreign, with 99 percent take-up and over P33.5 billion of subscriptions.
After the successful rights offer, BPI is now among the best capitalized banks in the Philippines and Asia-Pacific, according to a Moody’s statement released last week.
“The higher capital level is also well above the Basel III minimum of 8.5 percent, including a capital conservation buffer for the Philippine banks,†Moody’s said.
“Assuming BPI maintains 15 percent loan growth and similar levels of core profitability and earnings retention it has over the past five years, we estimate that its common equity Tier 1 ratio will be 17.8 percent at the end of this year and 16.9 percent at the end of 2015, also assuming no acquisitions,†it added.
In the press conference, Consing said they have not pursued talks with Philippine National Bank (PNB).
“None that I know of (any new talks between PNB and BPI). No we’re not (talking),†he said, when asked about the possible renewal of their interest to acquire the Tan-led bank especially now that they have enough capital to support the acquisition.
Moody’s had noted that BPI, the third-largest bank in the Philippines by assets, had been in talks to acquire PNB, the country’s fifth-largest lender, but the talks ended last year.
“In that instance, we estimated that BPI’s capital ratio would have declined by 3.5 percentage points if the acquisition had been paid for using a 50-50 mix of cash and newly issued equity. After the failed acquisition of PNB, BPI has continued to be vocal about its intentions on further expansions, both domestically and regionally,†it said.