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BDO Unibank, Inc. (BDO) has announced plans to raise up to P2.0 billion in capital for its rural banking unit, BDO Network Bank (BDONB), through the issuing of main ordinary shares.
The capital increase will enable BDONB to continue to grow its salary loan and micro, small, and medium enterprises (MSME) portfolios, which have grown at a compounded annual growth rate (CAGR) of 28 percent to P37 billion in the last three years.
Furthermore, this will improve BDONB’s capacity to reach and serve a wider range of markets, particularly the unbanked and underserved.
BDONB’s major shareholders, BDO, with an 85% stake, and Osmanthus Investment Holdings Pte. Ltd, with a 15% stake, have committed to participate in the capital-raising activity up to their proportionate shares. Periodic subscriptions of primary common shares up to P2.0 billion would be used to implement the capital plan.
Regulatory permissions will be required for the capital-raising scheme.
While BDONB has seen rapid growth in recent years, there is no guarantee that it will be able to maintain that pace in the future.
