East-West bank in successful IPO

The first Philippine bank to IPO in eight years sees its shares oversubscribed by more than three times.

East West Banking Corporation, one of the newer commercial banks, saw a massive surge in pent-up demand push the value of its IPO to US$123 million, an oversubscription of 3.4 times.

Analysts attributed the strong showing to the growing interest in the Philippines’ banking sector and the attractive price.

“We are quite happy with the results of the offering,” said Jonathan Gotianun, chairman of East West Bank.

The international offer was oversubscribed two times while the domestic offer was oversubscribed nearly three times. Most foreign investors were from Hong Kong, Singapore and London.

EastWest Bank offered 245.3 million common shares including 36.8 million in a greenshoe option to cover overallotments. Shares were priced at US$0.44 per share. The IPO ran from April 20 to April 26.

IPO shares were valued at 1.2 times the company’s 2012 book value, at a discount to the 1.7 times many banking stocks are trading at, analysts said.

EastWest Bank said it would use the proceeds to open some 100 branches and expand its ATM network and on other basic banking expenditures. It expects to expand its branches to 350 within three years.

The bank is only the second Philippine company to IPO so far this year.