The Philippine Star
Issue date: December 25, 2007
By Zinnia B. Dela Peņa


EastWest Bank hikes capital to PhP 5 billion

EastWest Banking Corp., the banking unit of the Gotianun-owned holding firm Filinvest Development Corp., is raising its capitalization to PhP 5 billion from only PhP 3 billion in line with its bid to become a universal bank.

Documents filed at the Securities and Exchange Commission (SEC) show that out of the PhP 2 billion increase in capital, PhP 500 million has been subscribed and paid for by controlling shareholder Filinvest Development Corp.

The additional capital will be partly sourced from the proceeds of FDC's planned follow-on offering of shares next year, estimated to raise up to P16 billion.

Of the expected proceeds, PhP 6 billion will go to Filinvest Alabang, Inc., PhP 3 billion to ALG Holdings Corp., which operates the company's sugar business, and PhP 2 billion to EastWest Bank's expansion. FDC owns 60 per cent of EastWest.

EastWest is also planning to issue PhP 1.25 billion in Tier 2 notes within the first quarter of next year.

FDC president Josephine Gotianun said the bank continues to be on the lookout for potential acquisitions as it gets offers from other banks.

She said an IPO for EastWest may happen in two or three years when it has grown into a much stronger institution.

EastWest was organized by the Gotianun family in March 1994 in a bid to re-enter the financial and banking services industry, an area in which it had gained previous experience in the 1970s and 1980s through its ownership of Family Bank and Trust Company, a universal bank, and Insular Bank of Asia and America.

EastWest is a medium-sized commercial bank in the Philippines that provides a range of services to consumer and corporate clients.

Its principal banking products and services include deposits, cash management, commercial and consumer loans, trade facilities, remittance, foreign exchange, fixed income securities investments, derivatives and trust services.

The bank has recently redefined its focus to aggressively reposition itself to capitalize on its competencies as a medium-sized bank with a nationwide presence in the Philippines and to focus on developing its banking services for the corporate middle-market and retail customers.