BDO Unibank hikes capital stock in bid for long-term growth

BDO UNIBANK, Inc. increased its common shares to 8.5 billion as it aims for flexibility to expand capital and position for long-term growth.
“The increase in the bank’s authorized capital stock provides the bank flexibility to increase its capital during periods of rapid organic growth or in the event of inorganic opportunities,” BDO said in a filing with the local bourse on Monday.
“This will allow BDO to continue to expand its business, strengthen its franchise, and deliver quality earnings to position the bank for long- term sustainable growth,” it added.
The bank’s authorized capital stock was previously at 5.5 billion common shares.
BDO’s board of directors likewise approved an amendment to the bank’s Articles of Incorporation to reflect the increase.
Meanwhile, BDO in a separate filing said they want to raise the capital of its rural banking arm BDO Network Bank (BDONB) by up to P2 billion to expand its reach among the underserved population and the micro-, small-, and medium-sized enterprises.
This will be funded through the issuance of primary common shares, it said.
“The capital increase will allow BDONB to support the sustained expansion in its salary loan and micro, small, and medium enterprises (MSME) portfolios, which have a compounded annual growth rate of 28% over the last 3 years to P37 billion,” the bank said. The plan is subject to regulatory approval.
Major shareholders of the rural bank, including BDO with an 85% stake and Osmanthus Investment Holdings with a 15% stake, have committed to participate in the capital-raising activity up to their proportionate shares.
BDO’s net profit climbed by 51% year on year to P42.8 billion in 2021 as its non-interest earnings recovered and loan loss provisions declined.
The bank’s shares closed at P131.60 apiece on Monday, down by 90 centavos or by 0.68% from its previous finish. — L.W.T. Noble