SinoPac Holdings Plans to Raise Capital through The Issuance of Common Shares to Enhance Bank Subsidiary’s Capital for Business Development
【2022.10.21】
SinoPac Holdings (SPH) announces the Board resolution of raising capital through the issuance of common shares on October 21, 2022. The maximum number of shares issued will be 800,000,000 shares and the tentative issue price is NT$15.25/per share (the actual pricing will follow relevant regulations). The tentatively planned fundraising scale is NT$10 billion, and the purposes are: (1) to strengthen the capital structure of its subsidiary Bank SinoPac (BSP), and (2) to support BSP’s business growth and development. Under the rate-hike backdrop, strong capital is crucial for BSP to enlarge interest-earning assets and increase its net interest income, which can enhance the profitability of BSP and SPH.
In order to foster business development, SPH has increased its authorized capital to NT$180 billion from NT$150 billion at the 2022 Annual General Shareholders’ Meeting.
In the first nine months of 2022 (9M22), BSP’s preliminary net income reached NT$12.08 billion and the annualized ROE was 11.74%. BSP’s 9M22 net income grew 34%, which was the largest among 14 subsidiary banks of Taiwanese listed financial holding companies, thanks to the evident growth of net interest income, net fee income, and other income (mostly from trading). As a result, SPH’s 9M22 preliminary net income was the only financial holding company in Taiwan that demonstrated a positive growth YoY.
Based on the September 2022 business data and a NT$10 billion fundraising scenario, it is estimated that the SPH’s CAR can increase by 6.35% and the BSP’s CET1 and BIS ratio can raise by 0.74%.
SPH plans to apply to the authority in December 2022, and the actual issue price is authorized by the Chairperson to decide after the effective registration. The process of fundraising and investment is scheduled to finish by the first quarter of 2023. The existing shareholder subscription ratio is tentatively set at 80%, and the actual share subscription ratio shall be adjusted based on the actual number of shares on the subscription record date.