MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) has approved the increase in the authorized capital of Security Banking Corp. to P10.1 billion from P10 billion.
In a disclosure to the Philippine Stock Exchange (PSE), SECB said it has gotten the go signal to issue one billion, non-cumulative, non-participating, non-convertible, voting preferred shares of stock with a par value of 10 centavos each.
The bank would also issue 602.83 million preferred shares.
The amendment is part of the bank’s capital program to provide incremental equity and indirectly improve the trading dynamics of the bank’s common shareholders.
SECB said it would file for approval of the increase in capital with the Securities and Exchange Commission (SEC) on April 11.
Last month, SECB announced plans to raise some P10 billion ($250 million) through the issuance of Basel 3 compliant Tier 2 bonds.
SECB said the Tier 2 bonds would either be peso or US- dollar denominated with a tenor of 10 years, with an option to redeem the bonds on the fifth year.
The bank said the bonds, which have a loss absorption feature, would be compliant with Basel 3.
The pricing and offering period would be determined depending on market conditions and the date of Bangko Sentral ng Pilipinas (BSP) approval.
The Tier 2 bonds issuance is part of the bank’s proactive capital and balance sheet management.
To sustain its healthy Basel 3 total Capital Adequacy Ratio (CAR) and support continued business expansion, the bank said it would capitalize on the markets’ robust liquidity and would address the demand for viable alternative investment instruments.
Last December 2013, the bank redeemed its Basel 2 compliant Lower Tier 2 subordinated notes of P3 billion.
As of Dec. 31, 2013, the bank’s Basel 2 total (CAR) was at 15.5 percent and Tier 1 CAR was at 15.1 percent, which were well above the BSP’s minimum requirements.