China Banking Corp., the seventh-largest lender in terms of assets, said its board approved a plan to issue long-term negotiable certificates of time deposit worth P20 billion to strengthen its assets base and fund future growth and expansion.
“Please be informed that the board of directors of the bank approved during its regular meeting…the issuance of long-term negotiable certificates of time deposit of up to P20 billion to support the bank’s asset generation plans and expansion programs,” China Bank said in a disclosure to the stock exchange.
LTNCDs offer higher interest rates unlike regular time deposits offered by banks. These instruments cannot be pre-terminated but can be sold in the secondary market, making them “negotiable.”
China Bank in June 2019 also conducted its maiden issuance of peso-denominated fixed-rate bonds worth P5 billion to support expansion and strategic initiatives. The offer period ran from June 10
to 28, 2019. The China Bank bonds carried an annual interest rate of 5.70 percent which would be paid on a monthly basis.
China Bank chief operating officer Romeo Uyan Jr. said the bond issue was a part of the bank’s P75-billion fund-raising program for the next three years.
China Bank raised P10.25 billion through a public offering of peso-denominated long-term negotiable certificates of time deposits last year.
The China Bank bonds will be listed on the Philippine Dealing & Exchange platform on July 10, 2019.
China Bank posted a 24-percent increase in net income in the first quarter to P1.9 billion, driven by the continued growth of its core businesses.
The January-to-March performance translated into a return on equity of 8.42 percent and return on assets of 0.86 percent.
Net interest income in the quarter grew 12 percent to P5.9 billion, boosted by the 41-percent jump in interest revenues from loans.
This was complemented by the 52-percent increase in non-interest income to P1.3 billion, attributable to fees, service charges and commissions.
