PBB sets P1.75 billion stock rights offering

MANILA, Philippines — Yao-led Philippine Business Bank (PBB) is raising P1.75 billion from the sale of new shares to existing shareholders to fund general corporate requirements.

In a disclosure to the Philippine Stock Exchange (PSE), the country’s second largest thrift bank said its board of directors approved last Aug. 17 the planned fund-raising activity via a stock rights offering at P10 per share or par value.

According to PBB, the bank will use the proceeds for the purpose of increasing capital and for general corporate requirements.

Last April, the Caloocan-based thrift bank raised its authorized capital to P15 billion from P10 billion to finance the continued expansion of its deposit and lending portfolios.

“The increase in authorized capital stock is in preparation for the continuing expansion of the bank’s core deposit-and-lending business. An expanded capital base will allow the bank to grow its risk assets and provide financing to its clients,” PBB earlier said.

Under the proposal, the bank -- owned by the family of businessman Alfredo Yao, is increasing the number of common shares to 1.37 billion from 870 million, with a par value of P10 per share. The capital base also consists of 130 million preferred shares with a par value of P10 per share.

The mid-sized bank said the change of the preferred shares feature from perpetual to convertible allows participating preferred shareholders to convert their preferred shares to common shares to help lower the bank’s financing costs.

“A bigger capital base will help the bank capitalize on opportunities PBB is seeing from its deal pipeline,” PBB president and CEO Roland Avante said.

The bank’s net income went up by 18.4 percent to P620.28 million in the first half of the year from P524.03 million in the same period last year.

Yao has a 37.26 percent stake in PBB, while his Zest-O Corp. owns 25.17 percent as of end December.

PBB was incorporated in the Philippines on Jan. 28, 1997 to engage in the business of thrift banking. It has 159 branches nationwide as of end June. Since 2014, PBB has entered into three purchase agreements involving Rural Bank of Kawit, Bataan Savings and Loan Bank, and Insular Savings Bank.