PNB sees P34-B windfall from prime properties


Philippine National Bank will be recording about P34 billion in one time earnings from its windfall from the revaluation of its low-earning but prime real estate assets.

In a disclosure to the Philippine Stock Exchange, the bank said the amount will be recorded in its books reflecting the difference between the fair value of P46.68 billion and the book value of P12.6 billion of the properties.

“Specifically, the change will be reflected in the Bank’s income statement as of May 28, 2021, thereby further strengthening its financial position as the transaction will generate P10 billion additional capital, after the effect of the property dividends,” PNB said.

PNB had started a series of transactions undertaken to monetize its low-earning assets b exchanging three prime properties with a market value of P46.68 billion, determined by a reliable independent source, for equivalent value in shares of stock of PNB Holdings Corporation (PHC), a wholly owned subsidiary.

Upon completion of the property-for-share swap, the Bank increased its share ownership in PHC.

After this, PNB disclosed a property dividend declaration consisting of 239.35 million of its shares of PHC which resulted in the reduction in the Bank’s total equity in PHC to 49 percent.

PNB said its stockholders can expect to gain from its disposal of low-earning assets through their stake in PNB Holdings Corporation which will be listed at the PSE after being distributed as property dividends.

PNB President Wick Veloso said “We are already doing preparatory work for the listing by way of introduction. At this stage, we cannot provide a definite timeline for the listing as this involves regulatory approvals. However the listing is a priority of PNB.”

The bank announced the property dividends as part of its move to recognize and monetize the unrealized value of its three major properties, namely: the PNB Financial Center in Pasay, PNB Makati Center in Ayala’s Central Business District, and the Prime Property at the corner of Buendia Avenue and Paseo De Roxas, also in Makati.

“Through the distribution of shares, all shareholders of PNB will become part owners of PNB Holdings, allowing them to benefit from future potential gains from the development of the properties,” said Veloso.

Stockholders can cash in on their dividends by selling their shares in the PSE once PNB Holdings is listed by way of introduction. Selling their shares in the PSE will result to the best market price and lowest cost for the stockholders.

They may also opt to buy additional shares if they wish to benefit more from the long-term growth of PNB Holdings Corp.

He added, “Shareholders will be given the opportunity to directly participate and earn from any growth that PNB Holdings is expected to generate.”

“With the planned listing of the PNB Holdings shares in the PSE, shareholders may opt to dispose their shareholdings at the most cost-efficient manner at the most appropriate time and capitalize on potential valuation gains,” said Veloso.