Phil Business Bank plans to raise capital

MANILA, Philippines - Philippine Business Bank (PBB), the thrift bank arm of the Yao family, is planning to raise its capital in the next few years to further strengthen its operations.

In a final prospectus submitted to the Philippine Stock Exchange, PBB said: “With current CAR (capital adequacy ratio) and the CAR improvements arising from the proceeds of the offer, the Bank is well positioned to raise new capital for further expansion of its operations.”

CAR is a measure of a bank capital’s capability to absorb risks.

“Following the offer, the bank will evaluate prospects for raising Hybrid Tier 1 or Tier 2 capital in the next few years,” PBB said.

PBB started its shares offering last Feb. 6 and will end on Feb. 12; target listing was set on Feb. 19.

The bank expects to raise about P3.08 billion in net proceeds after setting the initial public offering (IPO) price at P31.50 per share. PBB slashed the selling price from the maximum offer price of P41.94 announced earlier, which should have raised about P4.25 billion in capital for the bank.

Proceeds are expected to finance the banks’s branch expansion, including the acquisition of new branch banking licenses from the BSP.

PBB plans to put up 22 new branches to bring the total number of branches to 100 by yearend.

As of end-2012, the thrift bank has 78 branches, 41 of which are located in Metro Manila.

Part of the proceeds is also allotted to support its information technology project development and implementation.

The bank is also planning to acquire more assets using a portion of the IPO proceeds.

As of end-September last year, PBB is the fifth largest thrift bank in the Philippines with P29.7 billion in assets last year.

PBB posted P624.10 million in earnings in the first nine months of 2012 against P549 million in the same period in 2011.

From establishing its first branch in 1997, PBB has established 15 branches in Metro Manila and adjacent provinces in two years of operations.

The bank is controlled by the Yao family, which also owns juice drinks firm Zest-O and budget carrier ZestAir.