BAGUIO CITY – BDO Unibank, Inc. (BDO) announced the approval by its Board of Directors to raise P60 billion (approximately USD 1.25 billion) in additional core capital through a stock rights offer. The fresh capital will support the Bank’s medium-term growth objectives amid the country’s favorable macroeconomic prospects, and provide a comfortable buffer over higher capital requirements with the forthcoming imposition of the Domestic Systemically Important Bank (DSIB) surcharge.
The additional capital will allow BDO to sustain its momentum and take advantage of the country’s growth opportunities. Over the past five years, the BDO’s customer loan portfolio grew at a 19 percent compounded annual growth rate (CAGR), outpacing the industry’s 17 percent CAGR.
Going forward, the bank hopes to further expand its presence in emerging growth areas, particularly the consumer, provincial middle market and SMEs, and the underserved segments, as well as in infrastructure-related lending/project finance in line with the government’s thrust to promote countryside development and ramp up infrastructure spending.
As of June 2016, BDO’s consolidated Common Equity Tier 1 (CET1) ratio and Capital Adequacy Ratio (CAR) of 11.3 percent and 13.1 percent, respectively, are above the current regulatory minimum levels, even with the gradual implementation of the DSIB surcharge.
SM Investments Corp. (SMIC), the controlling and majority shareholder, has expressed its full support for the bank’s expansion plans and the rights offer. SMIC commits to subscribe to its proportionate share and is willing to underwrite any shares not taken up by minority shareholders.
Details on the proposed pricing, rights ratio and timetable will be disclosed once these are finalized.
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