Metrobank raising P20 B from LTNCD issue

MANILA, Philippines - Metropolitan Bank & Trust Co. (Metrobank) is raising P20 billion in fresh equity to take advantage of the liquidity in the financial system as well as low interest rate environment.

Metrobank said in a disclosure to the Philippine Stock Exchange (PSE) the planned issuance of Long Term Negotiable Certificates of Time Deposits (LTNCD) approved by the bank’s board of directors could be done in one or more tranches at P10-P20 billion per tranche.

Metrobank vice-president and head of investor relations Juan Placido Mapa said in a text message the exercise is aimed at taking advantage of the strong liquidity in the system as well as the low interest rate regime.

“The rationale for the LTNCD issuance is to lock in long term funding and take advantage of the liquidity in the system and relatively low interest rates,” Mapa said.

LTNCDs are like the regular time deposits that offer higher interest rates. However, LTNCDs could not be pre-terminated and are negotiable because these could be sold at the secondary market.

The bank’s board of directors has also granted Metrobank president Fabian Dee the authority to appoint the arranger or arrangers and required third parties for the issue.

Dee was also granted the authority to approve the pertinent details including the timing of the launch, issue size, tenor, interest rate, and denomination.

“Timing of the issuance will be subject to regulatory approvals and market conditions. We will apply for a program for one year and will most likely issue in tranches,” Mapa added.

Metrobank is the country’s second largest bank in terms of assets with P1.46 trillion as of end 2015 next to retail and banking magnate Henry Sy’s BDO Unibank Inc. with P1.94 trillion.

Earnings of Metrobank recorded a 20 percent growth in core profit to P18.6 billion amid a challenging year in 2015. The bank’s net profit declined 7.5 percent from P20.1 billion a year ago if non-recurring items in 2014 were included.

Non-recurring items in 2014 included a one-time gain from the sale of foreclosed assets and non-core assets such as the bank’s interest in Toyota Financial Services Philippines Corp.

Metrobank continued to pursue its coverage expansion strategy to improve customer accessibility by opening 23 branches and installing 126 new ATMs. This brought the consolidated total to 943 and 2,226, respectively.