China Bank returns to debt market to raise P15 billion for expansion

MANILA, Philippines — China Banking Corp. is tapping the domestic debt market anew after it received the green light from the Bangko Sentral ng Pilipinas (BSP) to raise as much as P15 billion for its strategic initiatives and expansion program.

In a disclosure to the Philippine Stock Exchange, China Bank senior vice president and corporate information officer Alexander Escucha said the central bank’s Monetary Board issued Resolution 247 last Feb. 13 approving the bank’s request to issue unsecured subordinated debt qualifying as Tier 2 capital under Basel III.

The bank’s board of directors approved the planned fundraising activity in September last year.

The Sy-owned bank established a P75-billion bond program in April last year to give it more options to raise funds and reduce reliance on deposits.

Of the total amount, China Bank successfully raised P30 billion via its maiden peso fixed-rate bond offering due 2021 which was six times oversubscribed last July.

The bank is also planning to raise up to P20 billion via the issuance of long-term negotiable certificates of deposits (LTNCDs) to support asset generation and expansion.

China Bank is the country’s fifth largest private bank in terms of assets and capital with P858.28 billion and P 117.39 billion, respectively.

Its net income increased by 20.6 percent to P6.7 billion from January to September last year compared to P5.6 billion in the same period in 2018. Total interest income surged by 32.1 percent to P26.7 billion, while interest income from trading and investments jumped by 87.2 percent to P7.9 billion amid the buildup in securities holdings.

On the other hand, non-interest earnings grew by 42.9 percent to P5.2 billion, driven mainly by service charges, fees and commissions as well as trading and securities gains.

China Bank’s operating expenses climbed by 19 percent to P15.6 billion during the nine-month period.

The bank’s asset base booked a 10.1 percent increase to P953.7 billion as its loan book reached P559.3 billion, while its deposit base amounted to P777.2 billion.