Union Bank of the Philippines’ planned P12 billion stock rights offering will be priced within the range of P54.48 to P58.38 per share although the entitlement ratio is yet to be set.
In a disclosure to the Philippine Stock Exchange, the bank said it is planning to offer up to 220.26 million rights shares from Jan. 16 to Jan. 27, 2023. The ex-rights date is on Jan. 9 while the record date is on Jan. 12, 2023.
The offering size was set by the bank’s Board of Directors last week as “The Bank’s latest balance sheet projections based on its economic outlook shows that any additional capital requirements beyond P12 billion can be internally generated from existing businesses.”
The proceeds from the stock rights offering will be used to fund the capital infusion to UnionDigital, loan availments by retail, corporate and commercial customers, other business growth opportunities or investment securities and other assets, and general corporate purposes.
The PSE per has approved last Dec. 16 the application of Union Bank to list additional common shares to cover its stock rights offering. Prior to this, the Securities and Exchange Commission had issued a Notice of Confirmation of Exempt Transaction confirming that the Offer is exempt from the registration requirements of the Securities Regulation Code.
Union Bank reported a 5 percent dip in net income for the first nine months of the year.
The bank said it booked P10.1 billion in net income in the first nine months of the year from P10.7 billion in the same period of 2021.
“Our earnings result translates to a return on equity of 10.4 percent which takes into consideration the impact of the additional capital of P40.0 billion from our Stock Rights Offer last May 2022,” the bank said.
Net revenues excluding trading gains increased by 37 percent year-on-year to P36.0 billion. Net interest margin also increased to 4.9 percent from 4.6percent in the same period last year coming from the expansion of earning assets and higher CASA ratio.
Net loans are up by 37 percent year-on-year to P449 billion, while CASA posted a record-high of 31 percent growth year-on-year to P417 billion.
Fee-based income increased by 64 percent to P5.1 billion driven by customer fund transfers and card transactions, bancassurance fees, and forex income.
As of end-September, the Bank has crossed the one trillion mark in terms of assets for the first time, with total assets at P1.05trillion, higher by 37 percent year-on-year.
“We have successfully closed the acquisition of the Citi consumer business and became the legal owner of the portfolio last August 1, 2022. The transaction added P98 billion of total assets to the Bank, including P65 billion in net loans and P30 billion in cash. It also included P67 billion in deposits with a CASA ratio of 89 percent,” said UnionBank Chief Finance Officer Jose Emmanuel U. Hilado.
He added that, “We are confident that the integration would be seamless as 1,500 former Citi employees, including 100 percent of the senior management of the consumer business, have joined UnionBank.”