Allied Bank boosts capital to P11 B

Allied Banking Corp., one of the two banks controlled by taipan Lucio Tan, has secured the Securities and Exchange Commission’s approval for an increase in its authorized capital stock from P500 million to P11.5 billion.

Based on documents filed with the SEC, the new capitalization consists of 11.45 million common shares and 50,000 preferred shares with a par value of P1,000 each share.

Out of the P11 billion capital hike, P100 million has been subscribed and paid for by the bank’s incorporator-directors.

Allied Bank and Philippine National Bank, the other bank owned by Tan, are expected to merge in the third quarter this year through a share swap. The merger will make surviving entity PNB, currently the country’s sixth largest privately-owned bank in assets, to become number four with consolidated assets of P388 billion and deposits of P197 billion.

PNB and Allied together will have a branch network of 626, making it the third largest in the country. Both banks have a combined 124 overseas branches and subsidiaries

PNB recently raised P6 billion ($135 million) from its recent offering of lower Tier 2 capital subordinated debt, which was more than three times oversubscribed, as both banks beef up their capital adequacy ratios ahead of the merger.

Allied Bank president Rey Maclang said the merger would complement the individual strengths of both lenders given that Allied Bank is strong on the Filipino-Chinese community of investors and on the small- and medium-scale entrepreneur niche.       

PNB, on the other hand, is strong not only on the corporate front but also on local government units, government-owned or — controlled corporations and in the provincial areas.