Philippine National Bank is selling its shareholdings in PNB General Insurers Co. Inc. (PNBGen) to Alliedbankers Insurance Corp. for P1.52 billion.
In a disclosure on Monday, the Tan-led bank said that the board of directors approved and confirmed the sale of its ownership, along with PNB Holding Corp.’s stake, to the insurance company.
The transaction is still subject to regulatory and other necessary approvals.
PNB shares inched up by 0.82 percent, or 25 centavos, to end at P30.70 each amid the 0.49-percent rise for the benchmark index last Monday.
To recall, PNBGen began operations in 1991 after the Tan-led bank subsidiary PNB Holdings acquired Charter Insurance Co. Inc., which was renamed to its present company name.
This is not the first time the bank sold a portion of its assets in 2020. PNB in September announced the sale of its prime real estate properties in exchange for P46.68-billion of additional stake in PNB Holdings. The bank would be subscribing to 466.77 million shares of the holding firm for P100 per share.
The subscription price was based on the par value per share of PNB Holdings Corp.
The shares to be issued are coming from the increase in the holding company’s authorized capital stock, which is subject to the approval of the Securities and Exchange Commission.
Upon approval of the transaction, the additional subscription will be equivalent to 99.46 percent of PNB Holdings’ outstanding shares.
The listed bank said that the sale was in line with its initiative of realizing the market value of its low-earning prime properties to strengthen its financial position amid the pandemic.
Earlier, PNB said that the sale of its properties is expected to generate P80-billion worth of new loans.
PNB saw its nine-month profits drop by around 39 percent to P3.87 billion from last year’s P6.34 billion because of higher provisioning for potential credit losses.
The bank has set aside loan loss reserves of P9 billion in the first nine months, which is six times more than it booked last year for the same period.
Its capital adequacy ratio and common equity tier 1 stood at 16.40 percent and 15.67 percent, respectively, as of end-September.