China Banking Corp., the seventh-largest lender in terms of assets, plans to raise up to P15 billion through the issuance of peso-denominated tier 2 capital notes mainly to fund its expansion program.
“Please be informed that during the regular meeting held this afternoon, 04 September 2019, our board of directors approved for the bank to conduct a capital-raising exercise of up to P15 Billion in the form of PHP-denominated Tier 2 Capital Notes, subject to approval by the appropriate regulatory authorities,” the bank told the stock exchange Thursday.
“The proceeds of this issuance will be used to support the bank’s strategic initiatives and expansion programs,” it said.
The bank in the middle of this year successfully raised P30 billion through the maiden issuance of peso fixed-rate bonds. Six times oversubscribed, it was one of the largest corporate bond issuances on a single issuance in the market and had the most number of registered bondholders to date.
China Bank remains one of the largest lenders in the country. Its net income in the first half rose 18 percent to P4.2 billion year on year driven mainly by strong loans and deposits.
Net income jumped 27 percent in the second quarter on year.
China Bank president William Whang said the bank’s strong financial performance in the first half reflected its good fundamentals that provided the foundation for sustainable growth.
He said the sustained loans and deposits build-up and greater contribution from fee-based businesses resulted in improved earnings, which translated into a year-on-year return on equity of 9.45 percent and return on assets of 0.95 percent.
Net interest income rose 6 percent to P11.7 billion, driven by double-digit growth in loans and securities. Meanwhile, fee-based income grew better than expected, by 61 percent to P3.4 billion, from higher trading gains and service fees and commissions.
Total resources stood at P908 billion, 18 percent higher year-on-year. Deposits rose 15 percent to P750 billion, driven by a 15-percent increase in CASA (checking and savings accounts).