PNB declares property dividend

MANILA, Philippines — Lucio Tan-led Philippine National Bank (PNB) has declared a property dividend as it readies the development of three prime properties in the cities of Makati and Pasay amid efforts to build up its financial position by reducing low-earning assets.

PNB president and chief executive officer Jose Arnulfo Veloso said the distribution of shares of PNB Holdings Corp., through the dividend declaration, allows the stockholders of the listed bank to share from the benefit of the realized values of the properties and any future valuation gains.

Last Friday, the bank’s board of directors approved the declaration of shares of PNB Holdings as property dividends to shareholders as of May 18.

Earlier this year, PNB obtained the green light from the Bangko Sentral ng Pilipinas (BSP), as well as the Securities and Exchange Commission (SEC), to acquire an additional 466.77 million shares of PNB Holdings with a par value of P100 per share amounting to P46.67 billion in exchange for certain real estate properties of the listed bank.

The investment into PNB Holdings and the dividend declaration are two important phases of the bank’s strategic initiative to recognize the unrealized value of the 10-hectare PNB Financial Center along Macapagal Boulevard in Pasay City, the PNB Makati Center in the Ayala central business district, as well as the foreclosed eight-hectare property at the corner of Buendia Avenue and Paseo de Roxas in Makati City.

“The timing of the development of these properties are already being studied by real estate experts who are already working closely with PNB Holdings and PNB,” Veloso said.

PNB Holdings increased its authorized capital stock to reflect the value of the three prime properties. Property dividends occur when a company declares and distributes assets other than cash, such as shares of stocks in a company’s subsidiary or affiliate or tangible products of the company.

Through the distribution of PNB Holdings shares via the declaration of the property dividends, all shareholders of PNB will become part owners of the holding company, allowing them to benefit from future potential gains from the development of the properties, either through potential dividends and/or through the increase in the valuation of the shares.