BSP clears PSBank’s P15-billion LTNCD offer

Lawrence Agcaoili - The Philippine Star

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) has given listed Philippine Savings Bank (PSBank) the green light to raise as much as P15 billion from the issuance of long-term negotiable certificates of time deposits (LTNCDs).

PSBank president Jose Vicente Alde said in a disclosure to the Philippine Stock Exchange (PSE) the final terms of the fund raising activity, including offering period and interest rates, would depend on market conditions.

“The issuance of LTNCDs will give PSBank an opportunitiy to access long-term funding as the bank further expands its consumer banking business,” Alde said.

The LTNCDs with a tenor of 5.5 years would be issued in two or more tranches over a one-year period.

The country’s second largest thrift bank in terms of assets last issued LTNCDs worth P3.375 billion in January 2017. It launched a P10-billion LTNCD offering in September 2016.

PSBank is the thrift bank arm of Metropolitan Bank & Trust Co. of taipan George SK Ty. It currently has 250 branches and more than 600 ATMs nationwide.

Its earnings jumped 25 percent to P641.1 million in the first quarter of the year from P511.1 million in the same quarter last year due to strong revenues composed of net interest margin and other operating income.

The bank’s loan book expanded 11.7 percent to P148.2 billion, driven by its consumer loan business.

LTNCDs have been an effective way for banks to raise cost-effective funding, while offering a new investment product to their own deposit base, most of whom are looking for long term assets that provide higher yields than traditional time deposits.

Banks that have so far issued LTNCDs this year include China Bank of retail and banking magnate Henry Sy with P10.25 billion followed by Sy-led BDO Unibank with P8.2 billion, Security Bank with P5.78 billion, Aboitiz-led Union Bank of the Philippines with P3 billion, and Robinsons Bank of tycoon John Gokongwei with P1.78 billion.   

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