Philippine National Bank, the fifth-largest lender in terms of assets, said it will soon start the issuance of up to P20 billion worth of long-term negotiable certificates of time deposits after getting the approval of Bangko Sentral ng Pilipinas.
PNB said in a disclosure to the stock exchange it received the approval from the regulator on Monday.
“Further to our disclosure dated July 22, 2016, please be advised that we received today, Nov. 28, 2016, a copy of the Bangko Sentral ng Pilipinas approval of the bank’s request for authority to issue long-term negotiable certificates of time deposit in the aggregate amount of up to P20 billion,” PNB said.
The bank said in July the proceeds of the issuance of the debt papers would be used as a part of its liability management exercise and to finance the bank’s operations.
“The proceeds will be used to extend the maturity profile of the bank’s liabilities as part of overall liability management and raise long-term funds for general corporate purposes,” the bank said.
LTNCDs refer to a bank product 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.
PNB posted a 21-percent increase in net income to P5.7 billion in the first nine months from P4.7 billion a year ago on the strength of its core businesses.
Net interest margin held steady at 3.1 percent, supported by the 12-percent growth in low-cost deposits which comprised more than half of total deposits.
PNB’s network reached 670 branches and 956 ATMs nationwide with over 74 branches and offices overseas as of end-September.