Philippine Bank of Communications, the 20th-largest lender in terms of assets, will issue long-term negotiable certificates of time deposits of up to P5 billion to raise funds and finance future business operations.
The bank said in a disclosure to the stock exchange Thursday its executive committee approved the plan in a meeting held Wednesday.
It said it would sell the paper in one or more tranches, subject to the approval of the Bangko Sentral ng Pilipinas.
“The purpose of the issuance is for general corporate funding, especially long-term funding,” the bank said.
LTNCDs are products 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.
PBCom posted a consolidated net income of P718.7 million in 2017, saying robust growth in the parent bank’s lending activities sustained the momentum from 2016.
PBCom said the loan portfolio expanded to P53.4 billion, with corporate and middle market segments accounting for 76 percent of the loans and consumer finance growing expanding percent.
Interest income on loans, which registered a 10.8-percent growth to P3.2 billion, contributed largely to the improvement in operating income, it said. The bank did not provide year-on-year comparison.
It said the loan portfolio growth was funded largely by low-cost deposit which rose 23.7 percent or P5.3 billion and made up 39.2 percent of total deposit.
“The efforts to strengthen low-cost deposit generation helped contain the increase in interest expense to a marginal 2 percent,” it said.
PBCom said it registered an enhanced return on asset of 0.77 percent in 2017, from 0.49 percent in 2016.