BDO Unibank Inc. (BDO) announced that it is planning to increase the capital position of its rural banking arm this year.
In a statement, the bank said it is looking to infuse about P2 billion to BSP Network Bank Inc. (BDONB) through the issuance of primary common shares.
“The capital increase will allow BDONB to support the sustained expansion in its salary loan and micro-, small- and medium-scale enterprises (MSME) portfolios, which have a compounded annual growth rate (CAGR) of 28 percent over the last 3 years to P37 billion,” the bank said. The lender added that the capital infusion will enhance the rural bank’s ability to cover and serve more markets, particularly the unbanked and the underserved segments of the population.
BDONB’s major shareholders, BDO, with an 85 percent stake, and Osmanthus Investment Holdings Pte. Ltd, with a 15 percent stake, have both committed to participate in the capital-raising activity up to their proportionate shares.
The capital plan will be implemented through periodic subscriptions of primary common shares up to P2 billion and will be subject to regulatory approvals.
In 2021, BDO Unibank recorded a 51-percent increase in its net income to hit P42.8 billion against P28.2 billion in 2020.
BDO, the country’s largest lender in terms of assets, said its full year profits were buoyed by an 11 percent increase in non-interest income and normalized provisions.
“This reflects the bank’s operational resiliency notwithstanding Covid-19-related headwinds depressing loan activity for much of 2021,” BDO said.