PSBank raises P5.1 billion from LTNCD issuance

MANILA, Philippines — Philippine Savings Bank (PSBank) raised P5.1 billion as it was forced to upsize the first tranche of its long-term negotiable certificates of time deposits (LTNCD) offering due to strong demand.

Jose Vicente Alde, president of PSBank, said the bank was overwhelmed with the strong demand as it was originally looking at raising P3 billion from the fund raising activity.

“The total amount raised by the bank exceeded the initial offer as the issue was met by strong demand, reflecting the investing community’s confidence in the bank. Proceeds of the note issuance will help underpin expansion of our consumer banking business,” Alde said.

The consumer banking arm of Metropolitan Bank & Trust Co. said the total amount raised represents an oversubscription of 70 percent from the initial offer size.

The long-term high-yielding notes, with a tenor of five years and six months, were priced to yield five percent a year to be paid on a quarterly basis.

Metrobank last issued LTNCDs worth P3.375 billion in January 2017 as part of a P10-billion LTNCD offering launched in September 2016.

Earnings of PSBank rose by 14.7 percent to P1.35 billion in the first half from P1.18 billion in the same period last year. Its total resources climbed 7.4 percent to P134.76 billion as of end-June.

Earlier, Metrobank received the green light from the BSP to raise as much as P25 billion from the issuance of LTNCDs.

Metrobank is set to issue the LTNCDs with a tenor of between 5.5 and 10 years in one or more tranches of at least P2 billion per tranche to be listed on the Philippine Dealing and Exchange Corp. (PDEx).

The planned fund raising activity in the onshore market aims to diversify the maturity profile of funding sources and support business expansion plans of the Ty-led bank.

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.