Philippine Savings Bank, the thrift banking arm of the Metrobank Group, is raising at least P3 billion through the issuance of peso fixed-rate bonds from July 1 to 17, 2019 in a bid to diversify funding sources.
The bank said in a disclosure to the stock exchange Tuesday the two-year bonds were priced at 5.6 percent a year with interest payments made every quarter and full principal paid out at maturity in 2021.
“We have always been on the lookout for opportunities to diversify our funding sources. Given market developments, we believe that this bond issuance is properly timed to provide potential institutional and individual investors with an alternative investment to lock in their funds at a high yield and for a relatively shorter tenor,” PSBank president Jose Vicente Alde said in a statement.
“Proceeds from the fund-raising exercise will support PSBank’s initiatives in expanding its consumer business as the bank gears up to provide innovative banking solutions and services,” he said.
The peso fixed-rate bond requires a minimum investment of P500,000 and is in multiples of P100,000 thereafter. The bond will be issued and listed on Philippine Dealing and Exchange Corp. on July 24, 2019.
Authorized selling agents are PSBank, Metrobank and First Metro Investment Corp., while Standard Chartered is the sole arranger and also a selling agent of the bond issue.
The bond issuance follows a highly-successful offering of long-term negotiable certificates of deposits, stocks rights offer, and medium-term fixed-rate notes last year, which generated P5 billion, P8 billion, and P3 billion in funds, respectively.
Even as the banking industry was challenged by a volatile interest rate market in the first quarter of 2019, PSBank managed to post a 10.3-percent growth in net income to P680.7 million from P617 million a year ago, putting it on track of its targets for the year.
The bank’s interest income rose 10.3 percent to P4.3 billion from P3.9 billion on year. Other operating income, which includes net service fees, registered a growth of 2.1 percent, while operating expenses, excluding provisions for impairment and credit losses, improved 6.4 percent year-on-year.