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BPI raises P50 billion from stock rights offering

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BANK OF THE Philippine Islands (BPI) has completed its stock rights offer (SRO), raising P50 billion to fund its business operations and expansion.

In a disclosure to the local bourse on Wednesday, the Ayala-led BPI said it has completed its rights offering and sold 558.7 million common shares priced at P89.50 apiece.

Eligible shareholders were entitled to subscribe to a share for every 7.0594 common shares as of record date April 6.

The rights offer was met with “strong support from both domestic and foreign shareholders,” the bank said, which resulted in an oversubscription by 22.3% as of the close of offer on April 25.

BPI’s major shareholders, including Ayala Corp., applied to subscribe for more than their pro-rata entitlements under the terms of the rights offer, the lender added.

“The overwhelming success of our stock rights offer is a testament to our shareholders’ support of our ability to execute on our own strategy,” BPI President and Chief Executive Officer Cezar P. Consing was quoted as saying in the statement.

“The strategy involves increased digitalization, a focus on higher margin products, and greater client inclusion, resulting in the continued delivery of superior risk-adjusted returns.”

BPI said in an earlier disclosure that the proceeds from the capital raising exercise will be used to fund the expansion of its loan portfolio particularly in the consumer, small to medium enterprises and microfinance segments.

The proceeds will also finance the expansion of its delivery infrastructure via investments in digitalization as well as additional branches of BPI, BPI Family Savings Bank and BPI Direct BanKo.

Debt watcher Moody’s Investors Service earlier said the SRO of BPI is credit positive as this will bolster the lender’s capital buffers.

BPI said the rights offer will increase its common equity Tier 1 ratio to 15.63% from 11.84% as of end-December.

The shares from the SRO are scheduled to be listed on the Philippine Stock Exchange on May 4.

BPI Capital Corp. acted as the offer’s sole global coordinator, lead manager, sole domestic manager, domestic bookrunner and underwriter, while Deutsche Bank AG, Hong Kong Branch, Goldman Sachs (Singapore) Pte. and JP Morgan Securities plc. acted as joint international bookrunners and underwriters.

In 2017, BPI booked a net profit of P22.42 billion, up 1.7% from the previous year.

BPI shares closed at P99.95 apiece on Thursday, down P2.05 or 2.01% from the previous day’s finish. — Karl Angelo N. Vidal