BPI loans out entire P10-B stock rights proceeds

MANILA, Philippines - The Bank of the Philippine Islands (BPI) has loaned out the entire amount of its recently-raised P10 billion capital in its 2010 loan portfolio.

In a report, BPI executive vice president and treasurer Antonio V. Paner said that net proceeds of its stock rights offer worth P9.95-billion were fully disbursed in loans.

“As of Dec. 31, 2010, net loan portfolio increased by P57.1 billion from August 2010 level of P223.7 billion to P280.8 billion as of December 2010, ” he said.

In August last year, BPI successfully launched a stock rights offer which was over subscribed by P4.176 billion as applications exceeded the prescribed 307.7-million rights shares to 436 million.

The issuance of preferred shares is part of the five-year program designed to strengthen BPI’s leading position in the country’s banking industry.

BPI president and chief executive officer Aurelio Luis R. Montinola III said the funds from the stock rights offer could, among others, be used “to take advantage of any opportunity,” as well as “possible capital regulatory requirements as a result of the Basel II and III framework.”

“We have roughly P350 billion in customer loans, and we are projecting an annual loan growth of between 10 to 15 percent,” Montinola added.

In the absence of “opportunity” to acquire in the near term, BPI has redirected the amount to its loan portfolio.

BPI reported a net income of P9.1 billion in the first nine months of 2010, 24 higher than the P7.3 billion recorded in the same period in 2009.

It also set aside P2.5 billion in impairment losses, P427 million up from last year’s P2.1 billion.

Total resources meanwhile went up 15 percent to P764 billion year-on-year basis, while deposits reached P613 billion for a 19 percent growth rate.

With assets held in trust at P458 billion, the Ayala-led universal bank managed total funds amounting to nearly P1.1 trillion as of end-September 2010.

BPI reported a market capitalization of P194 billion as of end of September, still the largest among local banks. Its Basel II capital adequacy ratio (CAR) was at 17 percent, while Tier 1 CAR was at 15.3 percent.