Gotianun-led East West Bank has obtained board approval to pursue a P50-billion capital build-up program to fund the bank’s rapid expansion over the medium-term.
In a disclosure to the Philippine Stock Exchange on Friday, East West said its board had approved an increase in authorized capital stock to P50 billion, more than double the current authorized capital stock of P20 billion.
The proposed capital of P50 billion will consist of 4.5 billion common shares with a par value of P10 per share and 500 million preferred shares with a par value of P10 per share.
The board also approved the declaration of 50 percent stock dividend or 750 million common shares to cover the required minimum subscription and payment for the increase of authorized capital stock.
These matters will be up for shareholders’ approval in a special meeting scheduled this Aug. 30.
Antonio Moncupa, East West vice chair, had said that the bank’s architectural infrastructure had been designed to be a bigger bank.
If East West were to be build a branch network of 500 from 445 at present and target average of P1 billion resources per branch, the bank has estimated that its resources should grow to P400 billion to P500 billion. This, in turn, is seen to require P50 billion in capital to maintain a 10 percent capital adequacy ratio.
Including about P14 billion in retained earnings, East West is currently capitalized at around P34 billion as of end-2016.
(Article and Image from business.inquirer.net)