“AUB has upgraded its status to a universal bank after completing regulatory requirement and getting the green light from the BSP [last Friday],” the bank said in a statement released over the weekend.
The bank filed its application for a universal bank license with the Bangko Sentral ng Pilipinas in November last year.
“The universal banking license will allow us greater flexibilities to further expand our consumer lending and banking services and engage in investment banking activities,” AUB President Abraham T. Co was quoted as saying in the statement.
A universal bank can perform the activities of an investment house aside from those of a commercial bank. Among the requirements for a universal bank license is the public offering of at least 10% of shares to the public. Another is the listing of the bank shares in the stock exchange within three years.
Last Thursday, AUB filed an application with the Securities and Exchange Commission to launch an initial public offering (IPO).
It will be second bank this year to launch an IPO after the Philippine Business Bank in February.
According to its prospectus, AUB will sell 102,857,140 million common shares to the public for as much as P110 apiece and raise as much as P11.31 billion.
IPO proceeds will be used to beef up the bank’s capital and bankroll its expansion plans, investments in information technology (IT) infrastructure and general operations.
The IPO, AUB said, will allow the bank to pursue its strategic growth initiatives, which include: “the continued expansion of its branch network via organic and inorganic means, expanding its credit and balance sheet to meet increased demand from the growing economy, and deepening and expanding its customer relationships while developing new business segments and enhancing the suite of products and services offered by AUB.”
Specifically, AUB will make the following allotments:
• P1 billion for the acquisition of new branch licenses;
• P1 billion for the expansion of its branch network;
• P650 million for IT-related projects; and
• P2.85 billion for general corporate purposes.
“Acquisitions or payments for branch licenses pertain to the cost of pursuing any growth opportunities through acquisitions as they arise within the next two years, or alternatively, the cost to procure additional restricted branch licenses from the BSP,” AUB said in its prospectus.
The bank currently has 107 branches nationwide and plans to add 45 more this year. It aims to double its current branch network by 2015.
“The remainder of the proceeds shall be used for general business purposes, particularly growing AUB’s interest-earning asset base,” AUB said.
UBS AG (Hong Kong branch) will serve as the sole global coordinator of the IPO. UBS, along with Credit Suisse (Singapore) Ltd., will also serve as book-runners and lead managers of the transaction.
AUB has been gobbling up other banks as part of its expansion plans. Last year, it acquired the banking assets and assumed the liabilities of Asiatrust Development Bank, Inc. The year before, the bank acquired the Cooperative Bank of Cavite and in 2010, the Rural Bank of Angeles in Angeles City, Pampanga.
AUB booked a net income of P1.36 billion last year, 19% higher than the P1.14 billion it earned in 2011.
Rebisco Biscuit Corp. controlled by businessman Jacinto Ng owns 44% of AUB. Other major shareholders of the bank are Kuo Yu Philippines, Holdings, Inc. and Lambda Holdings Corp.