THE Bangko Sentral ng Pilipinas and the Securities and Exchange Commission (SEC) have approved a P5-billion increase in the authorized capital stock of Philippine Business Bank (PBB).

The central bank greenlit the amendment in the bank's article of incorporation (AoI) in November while the SEC approval was secured last week, PBB told the stock exchange on Wednesday.

Under the amended AoI, the bank's capital stock will expand from P10 billion to P15 billion, divided into 1.37 billion common shares and 130 million preferred shares, with a par value of P10 apiece.

"The increase in authorized capital stock is in preparation for the continuing expansion of the bank's core deposit-and-lending business. An expanded capital base will allow the bank to grow its risk assets and provide financing to its clients," it said.

The regulatory agencies had also authorized a change in the bank's preferred shares feature from perpetual to convertible that would give participating shareholders the option to convert their holdings to common shares.

"Converting the preferred shares to common shares will lower the bank's financing costs," PBB explained. "The conversion provides for the reclassification from additional tier 1 (ATI) to core equity tier 1 (CET 1) capital."

The bank disclosed last week that its net income amounted to P1.83 billion last year, although further details were not immediately made available.

In the first nine months of last year, PBB saw earnings climb by 23.6 percent to P1.1 billion, from P926.6 million, following an 18-percent year-on-year increase in net interest income to P4.7 billion.

Despite macroeconomic and geopolitical challenges, the bank said it was keen on strengthening its core business and supporting the continued recovery of the country's economy while managing its risk assets.

PBB shares improved by 10 centavos, or 1.14 percent, to close at P8.90 each on Wednesday.

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