PNB raising P20B from LTNCD issue

MANILA, Philippines — Philippine National Bank (PNB) is raising as much as P20 billion as it plans to return to the debt market via the issuance of long term negotiable certificates of deposit (LTNCD).

In a disclosure to the Philippine Stock Exchange (PSE), the country’s sixth largest bank in terms of assets said its board of directors approved the issuance of peso-denominated LTNCD in one or more tranches.

The fund raising activity is still subject to the approval of the Bangko Sentral ng Pilipinas (BSP).

PNB said proceeds would be used to extend the maturity profile of the bank’s liabilities as part of overall liability management, support compliance with required BSP liquidity ratios.

Furthermore, the activity would also raise long-term-funds for general corporate purposes.

Last October, PNB raised P6.35 billion from the issuance of LTNCD due April 2023, more than double the issue size of P3 billion. The instrument that fetched an interest rate of 3.875 percent per annum were listed at the Philippine Dealing and Exchange Corp. (PDEx).

This brought the amount of LTNCD issued by PNB to P22.495 billion over the past three years.

In December 2014, PNB also issued P7 billion worth of LTNCD due 2022.

LTNCD offer higher interest rates but could not be pre-terminated like regular time deposits.

Earnings of PNB fell 21 percent to P4.5 billion for the first nine months of last year from P5.7 billion in the same period in 2016 due to lack of one-time gains.

PNB booked one-off revenue earned from the sale of its 51 percent stake in PNB Life Insurance Inc. to Germany’s leading insurer Allianz.

By the end of the third quarter, PNB had a total of 689 branches and 1,176 ATMs strategically located nationwide. It also maintained its position as the Philippine bank with the most extensive international footprint with 71 overseas branches, representative offices, remittance centers and subsidiaries across Asia, Europe, the Middle East and North America.