EastWest Bank to issue P1.2B in tier 2 debt


Posted at Jun 06 2008 02:57 PM | Updated as of Jun 06 2008 10:57 PM



EastWest Banking Corp., the banking arm of the Gotianun family's Filinvest group, is planning to raise about P1.2 billion through a tier 2 subordinated debt offer to fund expansion this year.

Jonathan Gotianun, chairman of Filinvest Development Corp., parent of EastWest, said that the bank plans to add 10 more branches to the current 77.

He said the subordinated notes issue would also strengthen EastWest's capital adequacy ratio (CAR), which fell from 15 percent at end-2007 to about 12-13 percent as of May.

The CAR is a measure of a bank's solvency, representing the share of its capital to its risk-weighted total assets. Banks are required to maintain a CAR of at least 10 percent.

To futher shore up its capital, Gotianun said EastWest would push through with its plan to list shares on the local stock exchange.

"We would conduct the initial public offering within two years. Right now, we want to complete our tier 2 offer first," he noted. "But we still don't have the exact dates for the tier 2 issue."

Last year, EastWest reported an 8-percent rise in net income to P137 million on the back of higher interest income.

Interest income grew 16 percent to P2.5 billion as the bank's credit cardholders rose 108 percent  to 125,000, generating receivables of P303 million.