PSBank raising P10 billion from notes issue

MANILA, Philippines — Philippine Savings Bank (PSBank) is raising P10 billion via the issuance of medium-term fixed or floating rate notes to further boost its consumer banking business.

PSBank president Jose Vicente Alde said the bank’s board of directors approved the fund raising activity last Thursday to access medium-term and stable funding as it further expands its consumer banking business.

“The final terms, including the offering period and interest rate, will depend on market conditions,” Alde said.

The consumer bank arm of Metropolitan Bank & Trust Co. (Metrobank) is ranked as the country’s second largest thrift bank in terms of assets.

Last August, PSBank raised P5.1 billion as investors swarmed the first tranche of its P20-billion long-term negotiable certificates of time deposits (LTNCD) offering.

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

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.

Earnings of PSBank rose by nearly 15 percent to P1.35 billion in the first half from P1.18 billion in the same period last year. Its total resources climbed by 7.4 percent to P134.76 billion as of end June.

Its parent firm, Metrobank, has also been undertaking a series of fund raising activities to diversify the maturity profile of funding sources and support business expansion plans of the Ty-led bank.

Metrobank has announced plans to issue P100 billion worth of peso-denominated bonds and commercial papers with tenors of at least three months.

It also received the green light from the Bangko Sentral ng Pilipinas (BSP) to raise as much as P25 billion from the issuance of LTNCDs.

The bank has so far raised P26.65 billion from previous issuances of LTNCDs in previous years, including P8 billion in October 2014, P6.25 billion in November 2014, P8.65 billion in September 2016, and P3.75 billion in July last year.