Metrobank, BPI plan stock rights offers

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Combination of file photos of Metrobank and Bank of the Philippine Islands (BPI) offices -- BW FILE PHOTO/Facebook/@bpi

TWO OF THE COUNTRY’S biggest banks are looking to conduct stock rights offerings (SRO) to fund their core business expansion and other operations.

Metropolitan Bank and Trust Co. (Metrobank) and Bank of the Philippine Islands (BPI) said in separate disclosures to the local bourse that they will offer their common shares to stockholders to raise fresh funds.

Metrobank said its board of directors approved to conduct an SRO to sell 819.83 million common shares, equivalent to the remaining unissued shares from the lender’s authorized capital stock.

Proceeds from the offer will be used to fund the Ty-led bank’s loans and fully acquire its credit card arm.

Metrobank said in October that it entered into an agreement with ANZ Funds Pty. Ltd. (ANZ) for the bank’s purchase of the latter’s 40% stake in credit card provider Metrobank Card Corp. (MCC).

MCC is a joint venture between Metrobank and ANZ formed in 2003, with the local lender holding the majority 60% stake.

In 2016, MCC reported total assets of P60.4 billion and a return on average equity of 36.3%.

Late last year, the lender bought a 20% stake in MCC from ANZ worth P7.4 billion, according to receipt of central bank approval obtained Dec. 29.

“The capital raising exercise is expected to enable the bank to pursue these business prospects to sustain the loan growth momentum, leveraging on the bank’s sales and distribution network that has rapidly expanded in the preceding years,” Metrobank said.

“Metrobank seeks to capitalize on the growth opportunities of large cap corporates and especially in its core franchise, the middle market and small to medium enterprises (SME) segments,” the lender’s disclosure read.

The bank also wants take the advantage of rising per capita levels, as this “[bodes] well for the potential in the growing consumer space, specifically in credit cards, auto loans and home mortgage.”

However, timing and size of the transaction is yet to be released, as these are still subject to other details such as offer price, receipt of regulatory approvals and market conditions.

UBS will serve as the joint global coordinator and joint bookrunner, while Metrobank’s First Metro Investment Corp. will serve as the joint global coordinator, joint bookrunner and issue manager.

Meanwhile, BPI said in its disclosure that its board of directors approved a rights offering which is expected to raise up to P50 billion.

The Ayala-led bank said the common shares will first be offered to eligible shareholders.

The final terms and conditions of the offer, including the issue size, entitlement ratio, offer price, record date, appointment of the parties and others, have yet to be determined, the lender noted.

“The bank expects to launch the rights offer after receiving required regulatory approvals,” BPI said.

“[T]he bank is conducing the rights offer in order to support the growth and strategic initiatives of the bank, including growing and strengthening its market-leading businesses and core franchises through the expansion of lending activities across consumer, SME, and microfinance segments…” it added.

It noted that it also intends to improve its infrastructure and will remain open to “inorganic growth opportunities.”

BPI said the offer will also improve the bank’s competitiveness and strengthen its capital base “as it seeks to pursue its growth strategy in the medium term.”