Philippine Business Bank eyes P3.19B from public offering

CEBU, Philippines - Through its initial public offering this month, the Yao thrift bank aims to raise P3.19 billion to achieve its plans of reaching 100 branches nationwide by the end of 2013 and expanding its coverage to small and medium enterprises as their main target market.

Philippine Business Bank, believed to be the first local company to go public this year, is managed by chairman emeritus Alfredo Yao and Francis Lee as chairman of the board.

Its joint lead underwriters for the issuance are First Metro Investment Corp. and SB Capital Investment Corp. while the Asian Alliance Investment Corporation is its financial advisor and issue manager

PBB president and chief executive officer Roland Avante said during the investors’ briefing held in Cebu that the bank felt the need to open more branches in the country, focusing to widen its reach to its market niche.

The bank plans to put up 22 more branches in addition to its network of 72 branches located throughout the country.

Its expansion program is strategically designed to target key areas and cities with strong SME base, Avante said.

He cited that the SME sector is considered to be the underserved market segment as most financial institutions focus on large corporates.

“They have fewer resources resulting in a more urgent need to borrow in the context of a growing economy. As our niche market, they present only moderate risks because these offer diversification while retaining strong potential for growth,” he explained. 

SMEs have assets between P3 to P100 million, representing the largest chunk of bank loans for more than 62% on the average from 2009 to 2011.

There are currently three existing PBB branches in Cebu.

Apart from the branch network expansion, Avante noted that net proceeds will also be used to acquire new branch licenses, implement its information technology projects for improved infrastructure system and expand its loan and investment portfolios.

The bank will allocate P100 million from its proceeds to its IT projects, P300 million to its branch expansion program and P2.6 billon for asset acquisition.

Based on its 2013 book value, PBB has set the final price at P31.50 per share for its 101.33 million new common shares which is 29.5% of the bank’s issued and outstanding common shares post-IPO capital.

Shares will be offered to the general public at 70% that is equivalent to 70 930 800 shares while 20% will be allotted to trading participants and 10% to local investors.

Offer period runs from February 6 until February 12. Listing and trading shares is scheduled on February 19.

PBB will be listed in the first board of the Philippine Stock Exchange.

The 7th largest thrift bank in the Philippines in terms of asset size at P29.7 billion and has the highest capital adequacy ratio in the thrift bank industry at 21.9%.

PBB is part of the Yao Group of companies with business interests covering food and beverages, air transportation, trade and marketing, real estate development and financial services.

The thrift bank offers a product line for deposits, treasury, trusts and loans.

In 2011, it ranked as the third largest in assets, net loans and deposits and second largest in capital accounts compared to other stand-alone savings banks.  (FREEMAN)