China Bank infuses P2 B in thrift unit

MANILA, Philippines - China Banking Corp. is pumping in P2 billion in fresh equity to beef up the capitalization of its thrift bank unit.

In a disclosure to the Philippine Stock Exchange, China Bank senior vice president and corporate information officer Alexander Escucha said the bank’s executive committee approved the infusion of P2 billion into China Bank Savings Inc. (CBSI).

Escucha explained the Bangko Sentral ng Pilipinas (BSP) has mandated the bank owned by retail and banking magnate Henry Sy Sr. to beef up the capitalization of CBSI as a prerequisite for its impending merger with Planters Development Bank (PDB).

He pointed out the capital infusion would be done upon receipt from the Securities and Exchange Commission (SEC) of its final approval of the merger between CBSI and PDB as well as the increase in authorized capital of the thrift bank.

The fresh equity, he added,  would boost the combined capital of CBSI and PDB to P6.1 billion.

“This enhanced capital position will support the future business growth of CBSI and PDB in 2016 as it continues to expand in the consumer as well as small and medium sized enterprises (SME) sector,” Escucha said.

China Bank bought out the 87.51 percent stake of the Puyat family in The Manila Banking Corp. in 2007. The thrift bank was renamed China Bank Savings in 2008.

Since then, China Bank has been pursuing the complete takeover of CBSI by offering to buy the holdings of minority shareholders.

The Sy-led bank has been gobbling up smaller banks to fast track its expansion nationwide. It acquired Unity Bank in 2012 and PDB in 2014.

In January last year, China Bank acquired PDB for P1.86 billion.

The China Bank Group also includes CBC Insurance Brokers Inc. and Bancassurance affiliate Manulife China Bank Life Assurance Corp.

China Bank offers a wide range of financial products and services through its over 497 branches including those of CBSI and PDB.

Earnings of China Bank grew eight percent to P3.64 billion in the first nine months of the year amid stronger lending and lower funding costs.