SECURITY Bank Corp., the fifth-largest lender in terms of assets, listed on Wednesday P8.6 billion worth of long-term negotiable certificates of time deposits at Philippine Dealing & Exchange Corp.
The deposits were the first tranche out of the P20-billion notes program recently approved by Bangko Sentral ng Pilipinas.
“Security Bank initially announced its intention to raise only P5 billion worth of LTNCDs with a tenor of 5 years and 6 months. But after receiving strong support from its own investor base and from other institutional accounts, the bank exercised its oversubscription option and raised a larger issue size,” the bank said in a statement.
The LTNCDs, which have a coupon of 3.875 percent, will mature on May 8, 2023.
The LTNCDs became the first instrument Security Bank listed in the platform, giving investors better access to the secondary market.
HSBC and Standard Chartered Bank acted as joint lead arrangers and book runners, and were also selling agents, along with Security Bank and Multinational Investment Bancorporation.
Security Bank earlier said it would use the proceeds of the notes issuance to fund future growth.
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.
Security Bank in the first nine months posted a 12-percent increase in net income to P7.4 billion over the same period last year on the back of double-digit growth in core businesses.
The profit was driven by a 24-percent or P2.8 billion increase in net interest income to P14.3 billion. Non-interest income including trading gains fell 15 percent to P3.5 billion on year.
Net income in the third quarter increased 21 percent to P2.14 billion year-on-year, driven by a 22-percent growth in net interest income to P5 billion.
The growth in net interest income was on the back of a 38-percent year-on-year increase in loans to P370 billion and a 44-percent increase in deposits to P431 billion. Low-cost deposits grew 22 percent.
Wholesale loans rose 36 percent, with corporate loans increasing 39 percent and middle market loans growing 32 percent.
Consumer loans increased 67 percent. Consumer loans accounted for 14 percent of the bank total loan portfolio.
Net interest margin stood at 3.2 percent in the third quarter of 2017, same as in previous quarter. Service charges, fees and commissions climbed 2 percent to P1.6 billion.
Operating expenses, excluding provisions for credit and impairment losses, were up 17 percent, driven by a 22-percent increase in manpower cost with the staffing of new branches, retail lending and e-commerce platforms.
Nineteen new branches were opened in the last 12 months from October 2016 to September 2017, inclusive of the eight new branches opened in the first nine months of this year.
Depreciation and amortization and software costs increased 40 percent due to the major information technology upgrade and branch network expansion. The cost-to-income ratio was at 50.6 percent.
Asset quality remained firm with net non-performing loan ratio of 0.11 percent. NPL reserve cover was 220 percent. Total assets increased 17 percent to P796 billion on year.
Shareholders’ capital was P103 billion, up 8 percent. Return on average shareholders’ equity (ROE) was 9.8 percent while the return on average assets was 1.5 percent. Common Equity Tier 1 ratio was 16.2 percent and total capital adequacy ratio—-a measure of financial strength—- was 18 percent.
The book value per share was P136.81 as of Sept. 30, 2017, up 8 percent from year-ago level.
On Oct. 27, 2017, Security Bank’s Board of Directors approved cash dividends of P1.50 per share representing regular semestral cash dividend of P1.00 per share and a special cash dividend of P0.50 per share, with record date on Nov. 17 and payment date on Nov. 24 this year.
This will bring the total cash dividends for the year to P3.00 per share. The bank had earlier paid cash dividends for the first semester of P1.50 per share on May 25 this year.
Security Bank currently has 298 branches and 694 automated teller machines nationwide.