BSP OKs Metrobank's 30% stock dividend

The Bangko Sentral ng Pilipinas (BSP) has approved the 30-percent stock dividend declaration of Metropolitan Bank & Trust Company (Metrobank). In a disclosure to the Philippine Stock Exchange, Metrobank said it received on May 22 BSP's approval of the 30 percent stock dividend. "The stock dividends declared on common shares of stock are in excess of Metrobank's present authorized capital stock. As such, this declaration will be further subject to regulatory approvals of the amendment of Metrobank's Articles of Incorporation increasing the authorized capital stock," the disclosure read. The company said stockholders of 2,111,386,017 common shares are entitled to the stock dividends, with a rate of 30 percent valued at P12.668 billion. Juan Placido T. Mapa III, Head of Investor Relations, said they are waiting for the approval of Securities and Exchange Commission for the hike in authorized capital stock. "Once the approvals are in place, we can now execute the stock dividend payouts," he said in a phone interview. "This is positive news for Metrobank. Interest in the company might likely be renewed. The stock dividend declaration gives additional income for shareholders," said Freya Natividad, analyst at 2TradeAsia.com, in a separate phone interview. In April 15, Metrobank obtained shareholders' approval of the stock dividend declaration and the increase in authorized capital stock. The increase in authorized capital stock will be from P50 billion to P100 billion, with the increase of P50 billion to be divided in to 1.5 billion common shares with par value of P20 per share and 1 billion preferred shares with a par value of P20 apiece. "The increase in authorized capital stock will give us flexibility to issue Basel III compliant Tier 2 notes," Mapa said. Earlier this year, Metrobank said it will issue $500 million worth of Tier 2 capital notes to comply with Basel III guidelines. Last year, the BSP said it will implement by January 1, 2014 the Basel III standards, or the new global benchmarks on capital conversion, common equity Tier 1, and total Tier ratio that will impact on banks’ debts and asset positions. The BSP issued Basel III guidelines which require Tier-2 notes to have a provision for the instrument to either be written off or converted to common equity upon occurrence of certain trigger events. — Danessa O. Rivera/BM, GMA News