GT Capital raises stake in Metrobank

MANILA, Philippines - GT Capital Holdings Inc., the listed conglomerate of George Ty, has raised its stake in its banking arm, Metropolitan Bank & Trust Co. (Metrobank).

The move would enable GT Capital to benefit from a more balanced income contribution from its investments, GT Capital president Carmelo Maria Luza Bautista said yesterday.

GT Capital, one of the country’s biggest conglomerates, has investments in banking, automotive, real estate, financial services, insurance and infrastructure, through a stake in Metro Pacific Investments Corp. (MPIC).

In a disclosure yesterday, GT Capital said it signed a memorandum of agreement to acquire 306 million secondary shares of Metrobank held by various Ty family-owned companies for approximately P24.72 billion.

The acquisition, which is still subject to regulatory approvals, would increase GT Capital’s stake in Metrobank by 9.622 percent to 36.092 percent from 26.47 percent at present.

GT Capital also signed a separate memorandum of agreement for the subscription by Grand Titan Capital Holdings Inc. (Grand Titan) to 9.5 percent or 18,296,685 primary shares of GT Capital for approximately P21.69 billion.

“Consequently, Grand Titan, which is the majority shareholder of GT Capital, will own 55.93 percent of the conglomerate. GT Capital’s total issued and outstanding shares will increase from 174,300,000 to 192,596,685,” GT Capital said in its disclosure.

The purchase price for the Metrobank shares and the subscription price for the GT Capital shares are both based on their respective 30-day volume weighted average prices (VWAP) as of the date of execution of the two memoranda of agreement.

Bautista said the increased stake in Metrobank would be accretive to GT Capital’s earnings per share.

“This will also be accretive to our earnings per share.Furthermore, the additional Metrobank shares put us at par with our peer conglomerates with respect to the percentage ownership of our banking subsidiaries and affiliates,” he said.

The acquisition will be done through the Philippine Stock Exchange (PSE) and executed by First Metro Securities Brokerage Corp. (FirstMetroSec).

In a filing in February, Metrobank reported that it booked a 2.89-percent decline in net income last year to P18.1 billion on the back of lower-than-expected growth in interest earnings, lower income from sale of foreclosed assets and higher loan loss provisioning.

However, in the fourth quarter of the year, Metrobank’s net profit rose by three percent to P5.5 billion.

In all, Metrobank’s 2016 income translated to a return on equity of 9.28 percent, lower than the previous year’s 10.83 percent, according to the disclosure.