Bank of the Philippine Islands, the nation’s third-largest lender by assets, said it expects to raise as much as 25 billion pesos ($578 million) selling shares to existing owners.
Majority shareholder Ayala Corp. will support the rights offer and the stock would be sold once the bank has regulatory approvals, the lender known as BPI said in a stock exchange filing. Proceeds will help expand lending and operations, and strengthen capital ahead of stricter requirements under Basel III, BPI said. Bigger rival BDO Unibank Inc. raised the equivalent of $1 billion from a rights offer in June 2012.
BPI’s share sale will be the third-largest equity offering in the Philippines this year, after LT Group Inc. and Robinsons Retail Holdings Inc., according to data compiled by Bloomberg. LT Group’s follow-on offer in April raised $912 million while Robinsons Retail completed an initial share sale worth about $621 million yesterday, according to data compiled by Bloomberg.
The rights offer will also support BPI’s plans to broaden retail, corporate and investment banking “as well as to ensure the financial flexibility to consider acquisition opportunities if and when they arise,” the bank said in a statement.
BPI’s net income in the first nine months of 2013 rose 19 percent to 15.8 billion pesos as revenue increased 12 percent, it said on Oct. 30. The lender is considering domestic takeovers and will bolster investment banking services to strengthen its position in Southeast Asia, President Bong Consing said in an interview in September.
The share sale is managed by BPI Capital Corp. The pricing is being determined, BPI said.
BPI rose 0.5 percent to 100 pesos at the close in Manila trading, before the announcement. The stock has risen 5.3 percent this year, compared with the Philippine Stock Exchange Index’s 11 percent advance.