Benta n’yo! BSP rejects BPI’s plan to retire P36B treasury shares as part of BPI Family merger

The Bangko Sentral ng Pilipinas has thumbed down the plan of the Ayalas to retire 406 million treasury shares of Bank of the Philippine Islands.

The BSP relayed its decision to BPI on September 29 noting that the retirement of treasury shares cannot be considered as sale or disposition of shares in accordance with Section 10 of Republic Act No.8791 or The General Banking Law of 2000.

Section 10 states: “No bank shall purchase or acquire shares of its own capital stock or accept its own shares as a security for a loan, except when authorized by the Monetary Board: Provided, That in every case the stock so purchased or acquired shall, within six (6) months from the time of its purchase or acquisition, be sold or disposed of at a public or private sale.”

The retirement of treasury shares, with a market value of P36.35 billion, is part of BPI’s plan to decrease its authorized capital from five billion shares to 4.594 billion shares to facilitate the bank’s merger with BPI Family Savings Bank starting 1 January 2022.

In a board meeting on September 30, BPI decided to drop its plan to decrease its authorized capital stock and moved to deny the pre-emptive rights over the sale of the 406 million treasury shares.

The board instead approved an increase in BPI’s capital by 400 million shares to 5.4 billion shares to accommodate the merger with Robinsons Bank of the Gokongwei family.