Phil Business Bank IPO 4x oversubscribed

MANILA, Philippines - Thrift lender Philippine Business Bank (PBB) of the Zest-O Group experienced robust demand for its P3.2-billion initial public offering (IPO), with its shares already four times oversubscribed, the issue underwriter said.

Demand was broad based as both institutional and retail investors picked up stocks of PBB, which is conducting the first IPO in the local bourse this year, it added.

“Demand is very strong. As of yesterday, it is already four times oversubscribed so we are confident that the IPO will be a success,” Roberto Juanchito T. Dispo, president of First Metro Investment Corp. (FMIC), said in a phone interview.

“We believe this is anchored on the strong business model of PBB, which is focused on small and medium enterprises (SMEs), the backbone of the economy,” Dispo said.

The offer period for the 101.333 million PBB common shares ends today, with listing date scheduled on Feb. 19.

FMIC and co-underwriter SB Capital Investment Corp.  have trimmed the offer price to P31.50 per share from a maximum price of P41.94 earlier to give investors more upside.

Dispo said the underwriters generated P12 billion worth of demand for the IPO.

Fresh capital from the IPO will allow the bank to strengthen its foothoold in the SME sector.

PBB plans to put up 22 additional branches to reach 100 branches at the end of the year.

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

PBB, which ended last year with 78 branches of which 41 are located in Metro Manila, posted P624.10 million in earnings in the nine months to September from P549 million a year ago.

PBB plans to grow its asset base aggressively, focusing on loan growth, expand its consumer loan portfolio through expanded branch network, and improve the use of the funds through the trading business particularly in low loan demand period.