Capital Adequacy Ratio (CAR) of Banco de Oro Unibank (BdO) is expected to rise to 20 percent from the current 15 percent following the bank’s successful stocks rights offering wherein it gained P43.5 billion, the biggest so far in the domestic market.
CAR is a measure of a bank’s capital and is a major gauge of its financial health.
The Bangko Sentral ng Pilipinas (BSP) requires banks to meet a 10 percent CAR while the Bank of International Settlements (BIS) has set a lower requirement of eight percent.
The bank said proceeds of its stocks rights offering will boost the bank’s Tier 1 capital and in turn its capacity to meet the stricter Basel III requirements come 2013.
Basel III targets to improve the banking sector’s ability to absorb shocks caused by financial and economic crisis as it requires banks to have higher quality and quantity in terms of capital base and risk coverage.
In a disclosure with the Philippine Stocks Exchange (PSE), the bank said the offer, which ended June 27, was oversubscribed by both domestic and international investors amid uncertainties in global economic condition.
A total of 895,218,832 rights shares priced at P48.60 each were issued during the transaction and these will be listed with the PSE on July 4, 2012.
The new shares will bring to 3,580,875,328 the company’s issued and outstanding common shares after the completion of the offer.
“BdO believes the offer has better-positioned it to fulfil its medium-term growth objectives and take advantage of the positive outlook on the Philippine economy,” it said.
BdO has tapped Citi, Deutsche Bank and J.P. Morgan as join international lead managers and international underwriters while United Overseas Bank Ltd. served as international co-lead manager and international co-lead underwriter.
Also, BdO Capital and Investment Corp served as issue manager and domestic underwriter.                      PNA