Philippine Savings Bank, the thrift bank unit of the Metrobank Group, will issue up to P15 billion worth of long-term negotiable certificates of time deposits to pursue the expansion of the consumer banking business.
The bank said in a disclosure to the stock exchange Tuesday its board approved the issue in a meeting held on Monday.
The bank plans to issue the long-term negotiable certificates of time deposits in two or more tranches over a period of one year and with a tenor of 5.5 years.
“The issuance of LTNCTDs will give PSBank an opportunity to access long-term funding as the bank further expands its consumer banking business,” it said.
The issuance is subject to the approval of the Bangko Sentral ng Pilipinas, while the final terms, including the offering period and interest rate, will depend on market conditions. The LTNCTDs would be listed in an accredited exchange, PSBank said.
LTNCDs are products offered to investors looking for a relatively safe investment asset with a higher interest rate compared to a regular savings account or short-term time deposit.
As an investment instrument, LTNCDs are very similar to time deposits and bonds but differ with regard to several features.
PSBank said net income in the first quarter of 2018 jumped 25 percent to P641.1 million from P511.1 million a year ago on strong net interest margin and other operating profits.
PSBank posted a double-digit growth of 15 percent in total operating income year-on-year to P3.7 billion from P3.2 billion.
Total loan portfolio rose 11.7 percent to P149.2 billion, driven by the bank’s consumer loan business. Total resources expanded to P224.8 billion, up 9.4 percent year-on-year, while deposits climbed 9.2 percent to P186 billion.
Total capital adequacy ratio—a measure of financial strength—stood at 13.7 percent while Common Equity Tier 1 ratio was at 11 percent, both well-above the Bangko Sentral ng Pilipinas’ minimum required level.