Last year we reported that the Zest-O group’s savings bank Philippine Business Bank (PBB) has filed for application with the Philippine Stock Exchange (PSE) to conduct an initial public offering. Recent reports show that the PSE has approved the bank’s application and the IPO will push through this February 2013.
According to the company’s IPO prospectus, the bank will issue 101.33 million common shares to the public, effectively leading to a 30% public float.
Offer Price, Offer Period and Stock Ticker
The stock is priced at a maximum of P41.94, yielding maximum proceeds amounting to P4.25 billion.
The final price will be determined on February 4. The IPO offer period will run from February 6 until February 12 and the tentative listing date of the stock on the PSE will be on February 19.
Philippine Business Bank will carry the stock ticker “PBB” once traded on the exchange.
Purpose of IPO
According to the company, proceeds of the IPO will be used to expand its branches nationwide, acquire new branch licenses, improve information technology infrastructure system, and expand its loan and investment portfolios.
Specifically, P50 million will be used to open new branches in Makati, Mandaluyong, Pasay, Pasig and Quezon within the first quarter of 2013.
An additional P50 million will be used in the second and third quarters of 2013 to open branches in Caloocan, Marikina, Pateros, Zamboanga City, Tuguegarao City in Cagayan, Cauayan City in Isabela, Butuan City in Agusan del Norte, Tagum City in Davao del Norte, Tacloban City in Leyte and Kalibo in Aklan.
Around P100 million will be used to improving the bank’s IT infrastructure system, such as current account and savings account/general ledger, treasury and loan-management systems, as well as upgrading its servers, during the fourth quarter this year.
The bank will also allocate P200 million to acquire branch licenses in the cities of Caloocan, Malabon, Navotas and Valenzuela; central and southern Luzon; the Visayas; and Mindanao. Remaining proceeds will be placed in short-term demand deposits and money market instruments.
Appointed joint lead underwriters are First Metro Investment Corp. and SB Capital Investment Corp. while Asian Alliance Investment Corp. is designated as financial advisor and issue manager.
Company Background
Philippine Business Bank is controlled by the AMY Group, a conglomerate owned by the family of Ambassador Alfredo M. Yao. The company also owns the Zest-O fruit juice line and the budget carrier Zest Airways.
The company currently has 72 branches nationwide.
As of September 2012, PBB posted net income of P624.10 million, up 13.6% compared to the same period the year before. In 2011, the company booked total net income of P746.97 million.
In the first nine months of 2012, PBB’s interest income dropped by 1.71% to P1.24 billion from P1.26 billion in the same period the year before due to lower interest income from investment securities.
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