Metrobank eyes P32-B stock rights offer

MANILA, Philippines - Metropolitan Bank & Trust Co. (Metrobank) is planning a stock rights offer expected to increase its common equity Tier 1 (CET1) by up to P32 billion.

Metrobank head of investors relations Juan Placido T. Mapa III said, however, that details of the offer is still subject to regulatory approvals as well as market and other conditions.

“We can not give out details yet as it is just for board approval,” he said.

He nonetheless said Metrobank believes the continued strengthening of the Philippine economy, a growing middle class, and low credit penetration create sustainable attractive growth opportunities for the banking sector in general.

“We see these opportunities not only in the large cap business segment, but especially in its core franchise, the middle-market and small to medium enterprises segments, as well as in the growing consumer space,” Mapa added.

The capital-raising exercise is expected to enable Metrobank to pursue the business prospects and support its accelerating growth momentum.

Funds to be raised from the rights offer would be used for capacity building by increasing its sales coverage and distribution network.

The additional capital is likewise expected to further enhance Metrobank’s capital ratios, keeping it well above Basel III requirements.

As of Sept. 30, 2014, the bank’s total asset base expanded 20 percent to P1.5 trillion. Loan growth ballooned 21 percent to P697 billion, on the back of a 23-percent growth in deposits to P1.1 trillion.

Total capital adequacy ratio (CAR) of 16.2 percent and CET1 of 12.1 percent, both ratios are well above the BSP requirement of 10 percent and 8.5 percent, respectively.

JP Morgan and UBS has been tapped as joint global coordinators, joint international lead managers and joint bookrunners. Subsidiary First Metro Investment Corp. (FMIC) is the sole domestic lead manager and joint bookrunner. Hongkong and Shanghai Banking Corp. (HSBC) is acting as co-manager.

Last October, Metrobank offered 5.5-year long-term negotiable certificates of time deposit (LTNCDs) which generated strong investor demand.

The issue was more than two times oversubscribed, prompting Metrobank to cap the issue size at P8 billion for the 5.5-year tranche to manage its debt maturities.