Yao's Phil Business Bank to go public

MANILA, Philippines - Amb. Alfredo Yao, who owns a diverse range of businesses ranging from food and beverages to air transport, is taking his banking unit Philippine Business Bank (PBB) public through the sale of up to P4.25 billion worth of shares.

PBB will serve as the first listed vehicle of Yao, who owns carrier Zest Air, leading ready-to-drink juice firm Zest-O, and financial services and real estate development companies.

In its preliminary prospectus submitted to the Securities and Exchange Commission, PBB said it would sell up to 101.33 million common shares at a maximum price of P41.94 each.

Proceeds from the IPO will be used to acquire bank branch licenses, expand branch network and implement IT (information technology) projects as well as for general banking purposes.

PBB was established in 1997 as Total Savings Bank. It provides close to the full range of banking services and products including cash management, retail and corporate lending, deposit products, international trade finance, treasury and trust products.

Its focus is to become the bank of choice of the SME market segment. To achieve this, PBB has increased its presence in several commercial and industrial centers and recruited branch and account officers with extensive client networks.

PBB has shown a remarkable rate of growth over the past three years with total resources rising 54.9 percent from P16.72 billion in 2009 to P25.9 billion as of end-2011. In the first half of the year, resources stood at P27.76 billion.

Loans and deposits grew at a compounded annual growth rate of 12.22 percent and 18.67 percent, respectively.

By the end of 2012, PBB aims to have a total of 85 branches and increase this further to 100 by the end of 2013. To date, the bank has 71 branches, of which 37 are located in Metro Manila and the rest in various provinces.

The bank also intends to expand its range of products and services. Among these plans include the establishment of treasury desks in selected branches which will offer government securities and other treasury products to the bank’s high networth and commercial clients.

PBB also plans to increase its portfolio of consumer loans including vehicle financing, housing, salary and other highly profitable loan products.

As of end-June 2012, total consumer loans amounted to P438.17 million, representing 2.48 percent of total outstanding loans. By 2013, the bank expects its consumer loan portfolio to account for 20 percent of total loans outstanding.