Metrobank launches P5-B LTNCD offering

MANILA, Philippines – Metropolitan Bank & Trust Co. (Metrobank) launched yesterday a fund raising activity where it hopes to raise at least P5 billion 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) it set the issue size of the offering of seven-year Long Term Negotiable Certificates of Time Deposits (LTNCDs) at P5 billion with an option to upsize.

The debt paper has an interest rate of 3.5 percent per annum payable quarterly.

The offer period started yesterday and would last until Sept. 12 wherein investors could invest a minimum of P50,000 with an increment of P50,000 thereafter.

ING Bank is the sole arranger, bookrunner and selling agent while Metrobank also serves as a selling agent.

Last June, the bank’s Board of Directors approved the issuance of P20 billion worth of LTNCDs to be done in one or more tranches.

Metrobank vice-president and head of investor relations Juan Placido Mapa III earlier said 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 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.

“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 P1.7 trillion as of end-June next to retail and banking magnate Henry Sy’s BDO Unibank Inc. with P2.1 trillion.

Earnings of Metrobank slipped 2.1 percent to P9.1 billion in the first half from P9.3 billion in the same period last year due to higher operating expenses.

The bank’s interest income rose 7.1 percent to P25.6 billion from P23.9 billion while non-interest earnings grew 14.7 percent to P12.5 billion from P10.9 billion.

However, Metrobank booked a 12.4 percent rise in operating expenses to P21.8 billion from P19.4 billion as it continued to hire client facing staff to improve customer coverage and made additional investments in technology and business process reengineering to improve efficiency.

As of end June, the bank’s footprint consisted of 954 branches and 2,285 ATMs nationwide.