* Latest in a string of Philippine banks boosting capital
* Largest equity offering in almost two years
* Shares down as much as 3.9 pct after disclosure (Adds milestone, share price, background)
By Neil Jerome Morales
MANILA, Jan 22 (Reuters) - The Philippines' Metropolitan Bank & Trust Co is seeking to raise up to 32 billion pesos ($721 million) through a rights offer, the country's largest equity offering in two years, as the lender seeks to boost capital.
The country's second-largest lender in asset terms said in a disclosure to the stock exchange that the timing of the stock rights offering - aimed at raising its common equity Tier 1 capital - is subject to regulatory approvals and market conditions. (bit.ly/1BHILs5)
Philippine banks are beefing up capital to comply with Basel III standards while bracing for stiffer competition after the Philippines enacted a law allowing foreign banks to take full control of domestic lenders.
Metrobank's rights offer is the largest equity fundraising in the local bourse since conglomerate LT Group Inc sold a record $911.6 million worth of shares in April 2013.
Shares of Metrobank fell as much as 3.9 percent following the disclosure in a market that slipped less than 1 percent. The stock has gained around 8 percent this year, better than the broader market's more than 2 percent rise.
The capital raising exercise will allow the bank to pursue business prospects and support growth, Metrobank said in a statement, adding it plans to use fresh capital to beef up its sales and distribution network.
The bank's total asset base rose 20 percent to 1.5 trillion pesos while loans grew 21 percent to 697 billion pesos as of end-September from a year ago.
Metrobank hired JPMorgan and UBS AG as joint global coordinators, joint international lead managers and joint book runners. The Philippines' First Metro Investment Corp is the sole domestic lead manager and HSBC is the transaction's co-manager.
As of end-September, Metrobank's capital adequacy ratio stood at 16.2 percent while common equity Tier 1 was at 12.1 percent, both well above the central bank's requirement of 10 percent and 8.5 percent, respectively.
Last year, the country's most profitable lender Bank of the Philippine Islands (BPI) raised 25 billion pesos from a rights offer and mid-sized Rizal Commercial Banking Corp (RCBC) sold a 20 percent stake to Taiwan's Cathay Financial Holding Co Ltd for 17.92 billion pesos.
Both BPI's and RCBC's equity issues were meant to comply with higher capital requirements. (Editing by Jacqueline Wong)