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BPI to increase authorized capital stock as part of plan to absorb thrift unit

BANK OF THE Philippine Islands (BPI) has secured approval from the Bangko Sentral ng Pilipinas (BSP) to increase its capital stock to P50.6 billion ahead of the bank’s planned merger with its thrift unit.

The Ayala-led lender said the 2% increase in its capital stock from P49.6 billion previously was approved by the BSP on June 8. This, as BPI’s common stocks were raised to five billion shares from 4.9 billion previously, still valued at P10 apiece.

“The amendment to the articles of incorporation — increase in authorized capital is related to the proposed merger of BPI Family Savings Bank, Inc. (BFSB) to BPI,” the parent bank said in a filing with the local bourse on Tuesday.

BPI announced its plan to absorb BFSB in January. The listed bank said the reduction in the gap in the regulatory reserve requirements between commercial banks and thrift banks was one factor for the decision.

S&P Global Ratings has said the proposed merger will have little impact on the credit profile of BPI and will help boost operational efficiencies for the surviving lender.

In April, the merger was approved by a quorum or at least two-thirds of BPI’s stockholders.

BPI said they expect the Securities and Exchange Commission to approve its Amended Articles of Incorporation by Oct. 31. Earlier, the bank said its merger with BFSB will be effective once the SEC issues a Certificate of Merger.

BFSB had P286.2 billion in assets as of end-2020, based on data from the BSP. Its loan portfolio is mainly focused on the housing and auto sector.

Its parent BPI’s net income declined 21.64% to P5 billion in the first quarter from P6.381 billion a year earlier. This was due to lower revenues caused by a decrease in net interest earnings.

BPI’s shares closed at P88.95 apiece on Tuesday, up by 95 centavos or by 1.08% from its previous finish. — L.W.T. Noble

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