PHILIPPINE National Bank and Security Bank Corp., two of the largest universal and commercial banks in the country, are issuing long-term negotiable certificates of time deposits to fund future growth.
PNB, the sixth-largest lender in terms of assets, said in a disclosure to the stock exchange Wednesday it would issue the third tranche of LTNCDs worth P3 billion, which was earlier approved by the Monetary Board of Bangko Sentral ng Pilipinas.
“This offering is under the authority to issue up to P20.0 billion of LTNCDs granted by the Monetary Board of the Bangko Sentral ng Pilipinas in October 2016,” PNB said.
The notes have an indicative interest rate ranging from 3.75 percent to 3.875 percent per annum, with the final rate to be determined during the offering period, and are payable quarterly.
PNB began offering the securities Wednesday until Oct. 19, 2017, with the issue date set on Oct. 26. The notes will mature on April 26, 2023.
PNB tapped Hongkong and Shanghai Banking Corp. Ltd. and ING Bank N.V., Manila branch as the joint lead arrangers and book runners for the issuance. The selling agents are PNB, HSBC, ING, and Multinational Investment Bancorporation. PNB Capital and Investment Corp. is the financial advisor.
Security Bank, meanwhile, said Wednesday it received the approval of Bangko Sentral to issue LTNCDs. Tthe bank said in a statement it would issue LTNCDs up to the aggregate amount of P20 billion.
It said the offering period for the first tranche would start this month or at a date to be determined, depending on the approval from Bangko Sentral and prevailing market conditions.
Security Bank posted an 8-percent growth in first half net income to P5.2 billion over a year ago, driven by a double-digit increase in net interest income.
Net income in the second quarter grew 32 percent to P2.43 billion, as net interest income rose 24 percent to P4.9 billion.
LTNCDs are time deposits that have a maturity of at least five years. The LTNCDs will be insured with Philippine Deposit Insurance Corp. for up to the maximum insurance coverage and subject to PDIC’s applicable rules and regulations.
Upon issuance, the LTNCDs will be listed for trading through the facilities of Philippine Dealing and Exchange Corp.
PNB in the first half of 2017 posted a 38-percent decline in net income to P2.67 billion from P4.32 billion a year ago due to the absence of one-off gains from the sale of foreclosed assets and lower trading and investment securities gains.
Interest income on loans and receivables rose 12.7 percent to P10.64 billion from P9.44 billion, while interest earnings on trading and investment securities fell 20.4 percent to P1.75 billion from P2.2 billion.
PNB’s loan book grew 16 percent, boosted by increases in loans to corporate, commercial and small and medium-sized enterprises. With AFP