PSBank to raise P40B via peso bond program

By Karl Angelo N. Vidal, Reporter
PHILIPPINE SAVINGS Bank (PSBank) is looking to raise P40 billion through peso-denominated bonds to diversify its funding sources.
In a disclosure to the local bourse on Wednesday, the thrift banking arm of Metropolitan Bank & Trust Co. (Metrobank) said its board of directors approved during its March 12 meeting the issuance of fixed-rate peso bonds amounting to P40 billion, which will be done in multiple tranches.
“The P40 billion peso bond program of PSBank aims to diversify the bank’s funding alternatives tapping long term funds and at the same time, targeting not just retail but institutional investors as well,” PSBank President Jose Vicente L. Alde told ����ý in an e-mail yesterday.
He added that the funds which will be raised from the bond issuance will “support the expansion of our consumer banking business.”
However, Mr. Alde noted that the bond issuance has “no definite timeline yet.”
The Ty-led thrift lender is one of the lenders who recently tapped the peso bond market after the Bangko Sentral ng Pilipinas (BSP) relaxed its rules on banks’ fund-raising activities.
Circular No. 1010 issued by the BSP in August simplifies the process for universal and commercial banks looking to raise funds via bonds, doing away with having to secure approval from them.
The reform is part of streamlined rules designed to deepen capital markets.
PSBank’s parent Metrobank, Bank of the Philippine Islands, BDO Unibank, Inc. and Rizal Commercial Banking Corp. have recently issued peso-denominated instruments to diversify funding sources and expand its businesses.
Meanwhile, UnionBank of the Philippines, Inc., Security Bank Corp. and Philippine National Bank have also established their own local currency bond programs to be issued in several tranches.
In September, the savings bank issued P10 billion worth of medium-term notes for medium-term and stable funding.
PSBank also raised P8 billion from its stock rights offer in January, selling 142.9 million common shares priced at P56 apiece.
In a separate disclosure yesterday, PSBank said its board of directors approved the increase in the bank’s authorized capital stock to P6 billion from the current P4.25 billion.
“The increase of the bank’s authorized capital stock will provide the bank flexibility for any potential business opportunity in the future which may require sufficient authorized and unissued shares,” Mr. Alde said.
However, he noted that the increase in capital is still subject to the approval of the bank’s stockholders at its annual meeting in April.
PSBank reported a net income of P2.7 billion in 2018, flat from the previous year’s level, as its lending and deposit-taking businesses continued to expand.
PSBank shares closed at P58 apiece on Wednesday, down 80 centavos or 1.36%.