Chinabank hikes capital to P25B

MANILA, Philippines - Sy-led China Banking Corp. will increase its authorised capital stock to P25 billion to cover for its eight percent stock declaration.

In a meeting, the stockholders approved the declaration of a P1 per share or 10 percent cash dividend or a total of P1.59 billion, and an eight percent stock dividend.

The stockholders also approved the increase in the bank’s authorized capital stock from P20 billion to P25 billion.

The dividends and authorized capital increase are subject to approval by the Bangko Sentral ng Pilipinas (BSP), the Securities and Exchange Commission, and the Philippine Stock Exchange.

The cash dividend represents 31 percent of the 2013 net income of P5.10 billion.

Based on Chinabank’s current share price of P56, it translates to a cash yield of 1.79 percent.

The stock dividend would cover the minimum subscription and paid in capital requirement arising from the increase in ACS.

“The good news for Chinabank shareholders about this year’s dividend declaration is that the new shares they are getting from their availment of the stock rights offer will also be entitled to the cash and stock dividends,” said Alexander Escucha, senior vice president for Investor Relations.

Chinabank’s P8-billion stock rights offering was priced at P49.50 per rights share. Eligible shareholders-registered holders of common shares as of April 24, 2014- were entitled to one rights share for every 8.834 existing common shares held. The offer period was from April 30 to May 7, 2014. Listing is on May 13, 2014.

Chinabank has been consistently providing good returns to shareholders thru considerable cash and stock dividends.

In 2013, it paid P1.20 per share equivalent to total cash dividends of P1.56 billion for a similar 31 percent payout ratio, which when combined with the appreciation in share price and stock dividends, gave Chinabank stockholders one of the best total returns in the banking industry.

The stockholders also approved China Bank’s amendments to its Articles of Incorporation to allow the waiver of preemptive rights of stockholders to conform with the general practice of Philippine banks and enable Chinabank to broaden its investor base and to provide flexibility in sourcing funds.

The stockholders further approved the increase in foreign shareholding limit from 30-to 40-percent to align with those of other publicly-listed banks, consistent with the 40 percent limit in the Philippine constitution, the General Banking Law of 2000, and the BSP Manual of Regulations for Banks.

At the same stockholders’ meeting, the incumbent directors were reelected. Hans T. Sy and Gilbert U. Dee were re-elected chairman and vice chairman of the Board, respectively, at the ensuing organizational meeting of the Board.

The other members of the Board are Peter Dee, president and CEO; Ricardo  Chua, senior executive vice president and COO; Joaquin T. Dee; Harley T. Sy; Herbert Sy; Jose Sio; and independent directors Dy Tiong, Alberto Yao, and Robert Kuan. Henry Sy Sr. remained honorary chairman and advisor to the Board.

Chinabank is the country’s first privately-owned local commercial bank and now the fifth largest universal bank by market capitalization, serving the banking needs of the corporate, commercial, and retail markets since 1920. Aside from organic growth, Chinabank enters into strategic alliances to expand and strengthen its operations.

Recently, it acquired Planters Development Bank (Plantersbank) to strengthen its presence and support to the SME sector. With the acquisition, the Chinabank Group has 450 branches to date, exceeding the target of 400 branches in 2014.

This wide branch network is complemented by electronic banking channels-ATM, online, mobile, and phone banking-that provide secure and reliable 24/7 banking service.