BDO eyes P13B from rights offer, notes issue


Posted at Feb 02 2009 03:11 PM | Updated as of Feb 02 2009 11:11 PM

Banco de Oro Unibank Inc. (BDO) is looking to raise up to P13 billion via a stock rights offering and the issuance of Tier 2 notes to strengthen its capital base.

In a statement, BDO said its board has approved both fund raising activities. It said the rights offer would be to existing shareholders while the notes issue would represent "the balance from its capital program in 2008."

The bank expects the twin intiatives to improve its capital adequacy ratio to approximately 16 percent. It said proceeds would be used for future expansion and potential acquisitions.

"We have already digested the problems resulting from the 2008 financial crisis, and they are now behind us. We are looking forward to opportunities that may arise this year," said Teresita Sy–Coson, chairperson of BDO.

During the first nine months of last year, BDO registered a 78 percent decline in its net income to P1.06 billion, principally due to losses from its exposure to failed US investment giant Lehman Brothers.

Meanwhile, a majority shareholder of BDO, SM Investments Corp. (SMIC), said it remains bullish on BDO and the Philippine banking industry.

"We believe the current situation presents opportunities for the bank to further consolidate its position," SMIC chief financial officer Jose Sio said.

As of Sept. 30, 2008, BDO, the country's top lender by assets, had total resources of P745 billion. Currently, it has a network of over 700 branches and more than 1,200 ATMs nationwide.