PSBank looks to raise P8 billion via stock rights offer in Q1 2019

PHILIPPINE SAVINGS Bank (PSBank) is set to raise approximately P8 billion through a stock rights offer (SRO) next quarter to support its growth.

PSBank, the thrift lending arm of Metropolitan Bank & Trust Co. (Metrobank), said in a regulatory filing on Tuesday it will issue a maximum of 184.7 million common shares equivalent to its remaining unissued shares through an SRO as approved by its board of directors on Oct. 15.

The bank targets to conduct the rights offer in the first quarter of 2019. However, the timing and transaction size, including the offer price, are still subject to regulatory approvals and market conditions.

PSBank has tapped First Metro Investment Corp. as the issue manager and underwriter of the offer, while Metrobank’s Trust Banking Group will serve as the stock transfer agent. Meanwhile, Picazo Buyco Fider and Santos Law Offices will be the legal counsel.

In an e-mail, PSBank President Jose Vicente L. Alde said the objective of the stock rights issuance “is to support the projected growth of the bank.”

In a previous interview, he said the thrift bank has been preparing for expansion as it is growing its consumer business.

“We have been growing our consumer business for the past years, and we still expect the consumer business to be robust in the next years. We’re preparing for that expansion,” he told BusinessWorld in July.

Last month, the Ty-led savings bank announced it will issue medium-term notes amounting to P10 billion, to “give PSBank an opportunity to access mediumterm and stable funding as the bank further expand its consumer banking business.”

Prior to this, it raised P5.08 billion in August through the issuance of long-term negotiable certificates of time deposits which carry a 5% coupon.

Local banks have been conducting various fund-raising activities ahead of tighter risk management requirements by the central bank under the international Basel 3 standard, which will take effect next year.

Aside from PSBank, other banks have raised additional capital through SROs this year, such as its parent Metrobank, UnionBank of the Philippines, Rizal Commercial Banking Corp., and Bank of the Philippine Islands.

PSBank saw its net profit climb to P1.35 billion in the first half of the year, up 14.7% from P1.18 billion booked in the same period in 2017, supported by strong net interest income and service fees.

Shares in PSBank closed at P74.50 each on Tuesday, down P2.25 or 2.93% from the previous session.