| THE government is getting out of the business of banking with the private sector and has secured an agreement with businessman Lucio Tan for a planned share sale between October to December this year.
At the annual stockholders’ meeting of the Philippine National Bank (PNB) on Tuesday, PNB president Omar Byron Mier said the public offering will involve a total 33 percent of the banks’ total outstanding shares issued.
“The public float will increase from 10 percent originally to 33 percent. We will conduct the sale in the final quarter of the year,” Mier told reporters.
The exercise, he stressed, will reduce Tan’s equity stake in the bank to just 67 percent.
Government exposure in PNB at the moment totals 12.53 percent, represented by a direct national government equity equal to 3.05 percent, plus 9.48 percent held by the Philippine Deposit Insurance Corp. (PDIC).
This means PNB will be selling the equivalent of 20.47 percent of its authorized capital stock later this year.
How much the bank will generate from the share sale was not disclosed, but PNB shares trade for P49 per share at the stock market at present.
Mier said they originally planned to sell the equivalent of 10 percent of total outstanding shares, but later increased it to equal 33 percent, including 90 million unissued PNB shares.
PNB only recently completed a five-year financial rehabilitation program that at one point required the infusion of government funds totaling P25 billion.
The rehabilitation program expired on May 3, and along with it, the authority to act as a government depository bank.
Notes from its annual report show the intent to have the authority extended by another year, with initial requests having been sent to Finance Secretary Margarito Teves already.
As depository bank, PNB may accept government deposits up to 10 percent of total deposits, or some
P18 billion in this case, based on end-2006 total deposits of P181.7 billion.
Mier said they plan to pay in full the balance of the P25-billion government emergency assistance later this
year, totaling P6 billion.
This means less or maybe nonexistent dividend payments for shareholders this year, but at least PNB will
finally be debt-free, Mier said.
The bank expects to generate around P1-billion net income this year, approximating the net income it made 10 years earlier, before the regionwide financial contagion made it very difficult for the bank to post profits.
In the first three months, the bank posted a consolidated net income of P308.3 million, or 60 percent more than a year earlier.
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