Metropolitan Bank & Trust Company (Metrobank, PSE: MBT) received Board approval to conduct a Stock Rights Offer (SRO) by way of issuance of up to a maximum of 819,827,214 common shares, which is equivalent to the remaining unissued shares from the bank’s authorized capital stock. Timing and size of the transaction are subject to other details such as the offer price and are subject to receipt of regulatory approvals as well as market and other conditions.
The bank believes that the robust growth of the Philippines will continue to support the prospects for accelerated loan expansion across the various segments of the economy. Metrobank seeks to capitalize on the growth opportunities of large cap corporates and especially in its core franchise, the middle market and small to medium enterprises (SME) segments. Rising per capita levels also bode well for the potential in the growing consumer space, specifically in credit cards, auto loans and home mortgage.
Over the last six quarters, Metrobank has consistently delivered over 20% loan growth, faster than the industry average. The bank’s total asset base is currently the second largest among Philippines banks, having expanded by 16% to PhP2 trillion as of September 30, 2017. The capital raising exercise is expected to enable the Bank to pursue these business prospects to sustain the loan growth momentum, leveraging on the Bank’s sales and distribution network that has rapidly expanded in the preceding years. To that end, the Bank intends to focus on enhancing customer experience through digitization initiatives and branch efficiencies.
In addition, as part of the Bank’s strategy to focus on higher-return segments, a portion of the SRO proceeds will be used for the acquisition of the remaining 20% equity stake in Metrobank Card Corp. (MCC). MCC is the industry leader in terms of cards-in-force and receivables based on the latest data from the Credit Card Association of the Philippines (CCAP). MCC continues to benefit from the Philippine consumer growth story, with ROE consistently above 30%. The acquisition was announced in October 2017 and will result in the Bank’s 100% equity ownership in MCC. Metrobank has purchased a 20% stake from its JV-partner ANZ Funds Pty. Ltd. (ANZ) for a consideration of PhP7.4 billion following receipt of BSP approval which was obtained on 29 December 2017. The remaining 20% is set to be completed by 3Q 2018 under the same terms.
As of September 30, 2017, the bank had a total capital adequacy ratio (CAR) of 16% and common equity tier 1 (CET1) of 13.3%, both ratios above the BSP requirements, inclusive of the D-SIB buffer.
The Bank has mandated UBS as Joint Global Coordinator and Joint Bookrunner and First Metro Investment Corporation as Joint Global Coordinator, Joint Bookrunner and Issue Manager.