Bank sets P4B IPO

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Bank of Commerce (BankCom) is looking at raising P4.03 billion through an initial public offering in March next year.

The company is looking to sell an initial 280.6 million primary common shares and another 42.09 million secondary common shares covering the oversubscription option, at an offer price of up to P12.50 apiece.

Philippine Commercial Capital Inc. (PCCI) will serve as financial advisor and issue coordinator while BDO Capital & Investment Corp., China Bank Capital Corp., and PNB Capital and Investment Corp. will join PCCI as joint issue managers, joint lead underwriters, and joint bookrunners for the share sale.

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BankCom, a unit of San Miguel Corp., will receive P3.51 billion of the proceeds, which it said it will use to fund its lending activities, acquire investment securities, and finance capital expenditure requirements in connection with the upgrading of its automated teller machine (ATM) fleet and its core banking system.

For the lending activities, BankCom intends to allocate P1.8 billion to increase its loan portfolio in 2022 in line with the strategy to increase interest income.

Loans will be primarily to corporate borrowers as well as some housing and auto loans, it said.

Some P922 million will go to capital expenditures that will be spend between the second half of next year until 2026 to replace BankCom’s 273 existing ATMs with 144 cash recycling machines, 129 new version ATMs, and to acquire 15 additional cash recycling machines and 12 cash deposit machines.

The allocation will also include acquisition of replacement for the bank’s existing Silverlake Integrated Banking Solution (SIBS) core banking system.

The remaining balance will go to the acquisition of government securities that will beef up the bank’s liquidity, as part of its liquidity management to both generate interest revenue as well as to satisfy the high quality liquid asset (HQLA) requirements of the Bangko Sentral ng Pilipinas (BSP) under Basel III.

As of end-June, the BSP ranked BankCom 16th among commercial banks in terms of assets.

BankCom has been in operation since 1963. In 2008, San Miguel bought into the bank and became a majority stakeholder through the combined voting stake of San Miguel Corp. Retirement Fund, San Miguel Properties Inc. and SMC Equivest.

Of the three, BankCom has reported the retirement fund and San Miguel Properties to be beneficial owners with a 39.94 percent and 39.89 percent stake, together with health maintenance organization Caritas Health Shield Inc. with a 9.77 percent interest.

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