November 24, 2017, 10:33 pm
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BDO secures approval for P60B rights offer

BDO Unibank, Inc. announced that the Board of Directors of the Philippine Stock Exchange (PSE), during its meeting on 14 December 2016, approved the listing of the new common shares to be issued from the bank’s program to raise up to P60 billion ($1.2 billion) in additional core capital through a stock rights offer. 

The Bangko Sentral ng Pilipinas had given its clearance to proceed with the offer on 23 November 2016.

This came after the bank issued last October $300 million in Fixed Rate Senior Notes at 2.63 percent, the lowest ever coupon rate for any US Dollar denominated bond for a Philippine issuer.

BDO said the fresh capital will support the bank’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 (DSIB) surcharge. 

BDO has appointed Credit Suisse, UBS and BDO Capital as Joint Global Coordinators and Bookrunners, with Citigroup, Goldman Sachs and HSBC as Joint Bookrunners. BDO Capital will serve as Issue Manager and Domestic Underwriter.  

The offer will be made to all eligible stockholders of record as of January 10, 2017 at a discount to the volume-weighted average price of the bank’s common shares listed on the PSE for a period to be determined prior to January 3, 2017. 

The final terms of the offer, including pricing and rights ratio, will be determined by BDO in consultation with the Joint Global Coordinators and Issue Manager and will be announced thereafter. 

The offer period will be from January 16 to January 24, 2017 and the rights shares are expected to list on the PSE around January 31, 2017. 

SM Investments Corp. (SMIC), BDO’s controlling and majority shareholder has expressed its full support for the Bank’s expansion plans and the proposed rights offer. SMIC commits to subscribe to its proportionate share and is willing to underwrite any shares not taken up by minority shareholders.

BDO posted a 10 percent year-on-year increase in net income to P19.3 billion in the first nine months of the year boosted by the bank’s core lending, deposit-taking and fee-based businesses.

BDO, in a statement, said net interest income (NII) for the first nine months grew 16 percent to P48.4 billion while customer loan portfolio expanded by 15 percent to P1.4 trillion on broad-based growth across all market segments.  

Total deposits rose 14 percent to P1.8 trillion, supported by the 21 percent increase in low-cost CASA deposits which now comprise 70percent of total deposits.

Fee-based income was up 15 per cent to P16.0 billion, while trading and foreign exchange income normalized to P4.5 billion, or a decline of 29 percent. 

Operating expenses increased by 29 percent to P52.8 billion, which reflects the consolidation of One Network Bank (ONB) and BDO Life Insurance operations. 

The bank added it has set aside P2.6 billion in provisions even as asset quality held firm. Gross non-performing loan (NPL) ratio was steady at 1.3 percent, while NPL cover remained high at 143 percent.

The bank’s capital base stood atP215.4 billion, with Common Equity Tier 1 (CET1) and Capital Adequacy Ratio (CAR) both remaining above the current regulatory minimum under the Basel III framework.
BDO is a full-service universal bank which provides a wide range of corporate, commercial and retail banking services. 

These services include traditional loan and deposit products, as well as treasury, trust banking, investment banking, private banking, rural banking, cash management, leasing and finance, remittance, insurance, retail cash cards and credit card services.  

It has one of the largest distribution networks, with more than 1,000 operating branches and over 3,500 ATMs nationwide.  

It also has a branch in Hong Kong as well as 25 overseas remittance and representative offices in Asia, Europe, North America and the Middle East.

BDO ranked as the largest bank in terms of total assets, loans, deposits and trust funds under management based on published statements of condition as of end-September, 2016. 
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