The Bangko Sentral ng Pilipinas ordered Bank of the Philippine Islands to pay a penalty of P1 million for its failure to comply with Section 10 of Republic Act 8791 or The General Banking Law of 2000 on the disposal of treasury shares related to its merger with BPI Family Savings Bank Inc.
The imposition of the penalty was contained in a letter from the Bangko Sentral ng Pilipinas on June 13, 2023.
“BSP imposed a monetary penalty on BPI amounting to P1,000,000.00 for failure to comply with Section 10 of Republic Act No. 8791 [The General Banking Law of 2000] on the disposal of treasury shares, arising from its merger with BPI Family within the six-month statutory period,” BPI said in a disclosure to the stock exchange Thursday.
BPI said that on Sept. 29, 2022 it announced that the proposed amendment to its articles of incorporation to decrease its authorized capital stock by retiring the treasury shares would no longer be pursued.
BPI made the disclosure after BSP did not favorably endorse the bank’s request to dispose of treasury shares arising from its merger with BPI Family Savings Bank Inc. through retirement of said shares.
This was in view of BSP’s opinion that retirement of treasury shares could not be considered as sale or disposition of shares in accordance with Section 10 of RA 8791.
BPI eventually informed the BSP of the approval of the declaration of property dividends as BPI’s mode for disposal of the treasury shares, which, however, would only be completed after obtaining regulatory approvals.
This was the second time this year BPI was fined by regulators. In February 2023, BPI was fined P30 million for its failure to get regulatory confirmation for its stock purchase and option plan in 2013.
The Securities and Exchange Commission granted the request of BPI to reduce the penalty to P30 million from the previous assessment of P135 million.
BPI remained one of the country’s strongest banks in terms of assets. In the first three months of 2023, it posted a net income of P12.1 billion, up 52 percent year-on-year driven by average asset base expansion, margin growth and lower provisions.
The first-quarter performance translated into a return on equity of 15.4 percent.
