Robinsons Bank set to increase capital to P27 billion

MANILA, Philippines — The stockholders of Gokongwei-led Robinsons Bank Corp. has approved its planned capital build up for future fund raising activities to bankroll the bank’s expansion program.

In a disclosure to the Philippine Dealing and Exchange Corp. (PDEx), Robinsons Bank senior vice president and corporate secretary Ruel Costuna said the planned increase in capital base to P27 billion from the current P15 billion was ratified during the bank’s special stockholders’ meeting last Aug. 23.

The bank’s authorized capital stock is divided into 1.5 billion common shares with a par value of P10 per share. JG Summit Capital Services Corp. controls 60 percent of the bank, while Robinsons Retail Holdings Inc. owns 40 percent.

With the higher authorized capital, the bank controlled by taipan John Gokongwei could issue new shares to existing shareholders through a stock rights offer, go public through an initial public offering (IPO), and take in a new strategic partner.

Robinsons Bank is the country’s 19th largest bank in terms of assets. It has 134 branches, while its subsidiary Legazpi Savings Bank acquired in 2012 has 12 branches.

The bank has earmarked P737 million for its capital expenditures this year to finance branch expansion and the implementation of information technology-related projects.

The capital expenditures budget would be funded out of cash flows from operations.

Robinsons Bank managed to eke out a 1.4 percent profit growth to P211.4 million in the first half of the year from P208.6 million in the same period last year after a sharp drop in earnings in the second quarter after its interest expense doubled, while trading and securities gains declined.

Last July, the bank raised P1.78 billion from the issuance of long-term negotiable certificates of deposits (LTNCDs) to support its expansion plans and diversify the maturity profile of its funding sources.

The LTNCDs due 2024 with an interest rate of 4.875 percent per annum were listed on the PDEx platform.

The amount raised represents the first tranche of its planned P5 billion LTNCD offering.

The second tranche for the balance of about P3.2 billion would likely be undertaken next year as higher interest rates as well as competition from other companies raising funds affected the fund raising activity.

LTNCDs offer higher interest rates, but cannot be pre-terminated like regular time deposits.