BSP OK’s Metrobank’s P25-B LTNCDs

METROPOLITAN Bank & Trust Co. (Metrobank) received central bank approval to issue P25 billion worth of long-term negotiable certificates of deposit (LTNCD) to diversify its funding sources.

In a disclosure to the local bourse on Monday, the Ty- led lender said the Bangko Sentral ng Pilipinas has approved the bank’s plan to issue peso-denominated LTNCDs of up to P25 billion as okayed by its board of directors in April.

The capital raising activity will be done in one or more tranches of at least P2 billion per tranche with tenors of 5.5 years up to 10 years, the lender said.

The issuance of the LTNCDs will be subject to market conditions. The issued long-term papers will be listed on the Philippine Dealing & Exchange Corp.

Like regular time deposits offered by banks, LTNCDs offer higher interest rates. However,

LTNCDs cannot be pre-terminated but can be sold on the secondary market, making them “negotiable.”

In April, Metrobank Head of Investor Relations Juan Placido T. Mapa III said the LTNCD issuance is part of the bank’s plan to diversify its funding sources.

“The proposed LTNCD program is part of our overall objective of diversifying funding sources and raising long term deposits,” Mr. Mapa told BusinessWorld in April, adding the bank has been issuing long-term notes regularly in the past few years.

To date, Metrobank has raised P26.65 billion through issuances of LTNCDs, with the latest one in July last year, where it raised P3.75 billion.

In April, Metrobank completed a P60-billion stock rights offer, selling 799.8 million common shares at P75 apiece.

Proceeds from the rights offering were set to be used for loan

expansion across the various segments of the economy, as well as the acquisition of the remaining stake of ANZ Funds Pty. Ltd. in credit card provider Metrobank Card Corp., thereby fully owning the credit card issuer.

Other lenders are embarking on fundraising exercises to boost their capital and expand their businesses. UnionBank of the Philippines, Inc., BDO Unibank, Inc., Security Bank Corp., East West Banking Corp. China Banking Corp. and Robinsons Bank Corp. have also issued LTNCDs this year.

Metrobank posted a net income of P5.2 billion in the second quarter, 31% higher than the P3.9 billion recorded in the same period last year, on the back of its robust core business.

Shares in Metrobank closed at P72.90 apiece on Monday, climbing P2.90 or 4.14%. •