Allied Bank eyes P5-B capital buildup

Allied Banking Corp. plans to raise about P5 billion either through a share offering or the issuance of Tier 2 capital next year.

Bank president Reynaldo Maclang said they are in talks with three financial institutions to handle its planned fund-raising activity.

These firms include Dutch financial giant ING Bank N.V. and Swiss bank UBS.

Tier 2 capital refers to reserves or supplementary capital consisting of revaluation reserves of fixed assets and long-term holdings of equity securities, general loan-loss reserves, hybrid capital instruments and subordinated debt.

Maclang said the bank also plans to reduce its ROPOA (real and other properties owned or acquired) either through a special purpose asset vehicle or by selling to a joint venture partner.

ROPOA are property items acquired by a bank in settlement of uncollected loans or past due accounts.

Meanwhile, Maclang said the impending merger of Allied Bank and Philippine National Bank both controlled by tobacco and liquor Lucio Tan, would take a while since there are several things that need to be studied.

If done, the merger will create the fourth-largest Philippine bank in assets.

PNB, partly owned by the government, is the country’s sixth-largest bank and the leading provider of services for millions of Filipinos working overseas. Income from remittance services is one of its main profit drivers.

Allied Bank, on the other hand, is a mid-sized commercial bank that targets the affluent Chinese-Filipino community.