BDO Unibank increases its share capital with the aim of long-term growth

BDO UNIBANK, Inc. increased its common stock to 8.5 billion as it seeks flexibility to raise capital and position itself for long-term growth.

“The increase in the bank’s authorized share capital provides the bank with the flexibility to increase its capital during periods of rapid organic growth or in the event of inorganic opportunities,” BDO said in a filing Monday with the stock exchange. local.

“This will allow BDO to continue to grow its business, strengthen its franchise and generate quality earnings to position the bank for long-term sustainable growth,” he added.

The bank’s authorized share capital was previously 5.5 billion common shares.

BDO’s board also approved an amendment to the bank’s articles of association to reflect this increase.

Meanwhile, BDO, in a separate filing, said it wants to raise the capital of its rural banking branch BDO Network Bank (BDONB) up to 2 billion pesos to expand its reach among the underserved population and micro, small and medium enterprises. businesses.

This will be funded by issuing primary common stock, he said.

“The capital increase will allow BDONB to support the continued expansion of its payroll loan and micro, small and medium enterprise (MSME) portfolios, which have grown at a compound annual growth rate of 28% over the past 3 years. to reach 37 billion pesos,” the bank said. The plan is subject to regulatory approval.

Major shareholders of the rural bank, including BDO with an 85% stake and Osmanthus Investment Holdings with a 15% stake, have pledged to participate in the capital raising activity up to their proportional shares.

BDO’s net profit rose 51% year-on-year to 42.8 billion pesos in 2021, as its non-interest income recovered and loan loss provisions declined.

Shares of the bank closed at P131.60 each on Monday, down 90 centavos or 0.68% from its previous finish. — Noble LWT

Sallie R. Loera