EPCIB vice co-chairman Winston F. Garcia revealed that the planned sale of the treasury shares would help improve the capital base of the bank. Garcia is also the president and general manager of the Government Service Insurance System (GSIS).
The government pension fund controls 12 percent equity in EPCIB or third largest behind the SM Group and the Social Security System (SSS).
Rough calculations indicate a minimum proceed of P7.5 billion from the disposition of the treasury shares. The commercial bank needs about P4 billion to strengthen its capital base, and retain the third largest bank position in the industry.
It will also help the bank expand its growth potential and cope with the stricter Basle II risk-weight conditions that will be imposed by the Bangko Sentral ng Pilipinas (BSP).
Garcia claims that the board approved the policy during its meeting in Aug. 18 although the details will still have to be worked out by the bank management.
This may include the possibility of the giving the "right of first refusal" to the existing shareholders to purchase the 10.8 percent treasury shares on a pro-rated basis or depending on one’s current holdings before being offered to the outside investors.
The treasury shares could also be sold in block to get a premium and maximize the yield potential for the bank. It is more than enough for a one board seat. – TPT