Philippine Daily Inquirer
Issue date: December 24, 2007
By Elizabeth Sanchez-Lacson


EastWest Bank raising capital by PhP 2.25B in '08, eyes IPO in '09

EASTWEST BANKING CORP., the banking arm of the Gotianun family's Filinvest Group, is considering an initial public offering in 2009.

Filinvest Development Corp. president Josephine Gotianun-Yap said the group was planning to increase the capitalization of the bank by PhP 2.25 billion next year through a combination of equity and a tier 2 subordinated debt offer.

Tier 2 capital or a measure of a bank's financial strength may include undisclosed reserves, revaluation reserves, hybrid instruments and subordinated debt.

Out of the proposed increase, about PhP 1.25 billion may comprise the tier 2 capital.

However, Gotianun declined to comment on the prospective size of the bank's IPO, saying it was still too early to determine this.

"EastWest is looking at the (possible IPO) but not next year. That's part of their program. Possibly two to three years down the road, "Gotianun said.

EastWest Bank currently has a capital of PhP 3.45 billion.

FDC, the publicly listed holding firm of the Gotianun family, earlier filed an application with the Securities and Exchange Commission (SEC) to issue up to 3.5 billion new and existing shares.

In a prospectus filed with the SEC, FDC said it would use the net proceeds estimated at PhP 16 billion to fund, among others, the increase in capital of EastWest Bank and the possible acquisition of another bank.

For the nine-month period, EastWest Bank reported that net revenues grew 47 percent to PhP 1.3 billion from PhP 900 million in the same period last year due to higher automobile and credit card loans.