BDO Unibank Inc., the country’s largest lender controlled by tycoon Henry Sy, successfully concluded a P60-billion common stock rights offering, the biggest-ever common equity capital raised from the domestic market.
BDO president Nestor Tan said in a news briefing in Makati City Tuesday the offer increased the bank’s common equity tier 1 capital, making it better positioned to fulfill its medium-term objectives and take advantage of the positive outlook on the Philippine economy.
Tan said BDO was planning to put up 50 to 70 branches in 2017, the usual target every year, depending on the growth prospects. He said most of the branches would be located outside the National Capital Region.
“The uncertainties subsided and we are more optimistic of growth, reflecting the size of this issuance,” Tan said.
Tan, however, said the bank was not contemplating on making another offering in the months ahead.
The capital-raising initiative is seen to provide a comfortable buffer over higher capital requirements with the imposition of domestic systemically important bank surcharge. DSIBs are those banks whose failure or collapse is seen to significantly affect the economy.
The offer was fully subscribed and led by major shareholder SM Group. The offer also attracted strong participation from the bank’s domestic and international investors.
The 716,402,886 rights shares were issued pursuant to the offer at a price of P83.75 each and listed on the stock exchange on Tuesday. BDO’s total issued and outstanding common shares after the offering stood at 4.37 million.
Credit Suisse, UBS and BDO Capital served as joint global coordinators and together with the joint global coordinators Citigroup, Goldman Sachs and HSBC acted as joint bookrunners. BDO Capital & Investment Corp. served as issue manager and domestic underwriter.
Tan earlier said the proceeds from the stock rights offer would be used to support BDO’s medium-term growth objectives amid the country’s favorable macroeconomic prospects and provide a comfortable buffer over higher capital requirements with the forthcoming imposition of the domestic systemically important bank surcharge.
BDO earlier said it was eyeing a 10-percent growth in net profit in 2017 to P28.810 billion from the 2016 projection of P26.129 billion amid the robust domestic economy that will sustain the expansion of its core businesses.