PBB eyes 100 branches by yearend

By Neil Jerome C. Morales, The Philippine Star

Posted at Jan 19 2013 09:10 AM | Updated as of Jan 19 2013 05:11 PM

MANILA, Philippines - Thrift lender Philippine Business Bank (PBB) will continue serving small businesses as it grows its network to 100 branches by end-2013, bank officials said.

Proceeds from PBB’s planned P4.25-billion initial public offering (IPO), the first in the country this year, will allow the bank to strengthen its foothoold in the small and medium enterprise (SME) sector, the officials said.

“The SME segment is the backbone of the Philippine economy. The SME entrepreneurs should have access to capital to grow their businesses,” said PBB chairman emeritus Amb. Alfredo Yao.

He said PBB will be a vital part of the SMEs.

“The segment is relatively underserved since most financial institutions focus on large corporates and consumer banking,” said PBB president Rolando Avante.

SMEs are underserved despite accounting for 32 percent of the country’s employment and 25 percent of export revenues, Avante said.

PBB, the thrift bank of the Yao family’s Zest-O Group, held yesterday an investors’ briefing for its IPO.

Bulk of the net proceeds of the offering, or approximately P3.61 billion, will be used to finance the bank’s lending activities and fund the acquisition of investment securities. Around P400 million will finance capital expenditure requirements as the lender expands its branch network.

“There are plans to put up additional 22 branches to end with 100 branches at the end of the year,” Avante said.

As of end-September last year, PBB is the fifth largest thrift bank in the Philippines with P29.7 billion in assets last year.

PBB, which ended last year with 78 branches of which 41 are located in Metro Manila, posted P624.10 million in earnings in the nine months to September from P549 million a year ago.

Avante said PBB plans to grow its asset base aggressively, focusing on loan growth, expand consumer loan portfolio through expanded branch network and improve the use of the funds through the trading business particularly in low loan demand period.

PBB will list up to 343.333 million shares in the bourse.

The thrift bank will sell 101.333 million common shares to investors at a maximum price of P41.94 per share for a total transaction value of P4.249 billion.

This will result in a 30-percent public float for PBB, which will have a market capitalization of P14.399 billion following the IPO.

PBB tapped First Metro Investment Corp. and SB Capital Investment Corp. as joint lead underwriters for the IPO. Under the lender’s timeline, price setting for the IPO is scheduled on Feb. 4 prior to the Feb. 6-12 offer period.

Tentative listing date is on Feb. 19.

From its first branch in 1997, PBB has established 15 branches in Metro Manila and adjacent provinces in two years of operations.

The Yao family also owns juice drinks firm Zest-O and budget carrier Zest Airways.