Philippine Business Bank (PBB) to IPO in 2012 or 2013

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The Philippine Business Bank, a savings bank under the conglomerate of the Zest-O group, is planning to issue shares in an initial public offering (IPO) by the end of 2012 or by the first quarter of 2013.

Last week, the bank filed its application with the Securities and Exchange Commission in a bid to become one of the major players in the local banking industry.

In its application, the company said it is looking to raise up to P4.25 billion by issuing 101.33 million primary common shares. This represents 29.5% ownership of the bank.

Proceeds are to be used “to fund our new branch licenses, the new branches that we will put up, the improvement of our IT system and our lending business,” said PBB president Roland Avante.

The final offer price and terms are yet to be finalized but the bank said its IPO stocks will have a par value of P10 and sold for no more than P41.94 per share.

Philippine Business Bank will have its IPO upon approval of its application by the Securities and Exchange Commission and the Philippine Stock Exchange. According to Mr. Avante, this will most likely happen before the end of the year or during the first quarter of next year.

Maybank ATR Kim Eng Capital Partners is the lead underwriter of the IPO.

Incorporated in 1997, the bank currently has 71 branches, 37 of those operate in Metro Manila. PBB targets to have 85 branches by the end of 2012 and 100 branches by the end of 2013.

The bank booked net income of P746.97 million in 2011, up 9.3% from P683.28 million in 2010. In the first six months of 2012, the bank more than doubled its net income to P496.64 million compared to the same period in 2011.

Philippine Business Bank is owned by the AMY Group, a conglomerate owned by the family of Ambassador Alfredo M. Yao. The company markets the popular Zest-O line of fruit juices and owns the budget carrier Zest Airways.

Its sister companies include remittance company Money Movers Inc., travel agency King of Travel, real estate development firm SMI Development Corp., and manufacturer Harman Foods (Philippines).

About the Author

James Ryan Jonas teaches business strategy, investments, and entrepreneurship at the University of the Philippines (UP). He is also the Executive Director of UP Provident Fund Inc., managing and investing P3.1 Billion ($56 Million) worth of retirement funds on behalf of thousands of UP employees.

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