Security Bank launches initial deposit instrument worth P5b
Security Bank Corp., the fifth-largest bank in terms of assets, on Tuesday launched an initial tranche of long-term negotiable certificates of deposits worth P5 billion in a bid to better manage its liabilities and fund future growth.
Security Bank said 0n a statement the issuance was in line with the Bangko Sentral ng Pilipinas’ approval to issue notes on Oct. 5, 2017.
“For the first tranche, Security Bank intends to offer at least P5 billion worth of CDs, and may upsize the transaction depending on demand. It will have a tenor of 5 years and 6 months and will be marketed at an indicative rate of 3.875 per annum,” it said.
“The final rate for the CDs will be determined during the public offer period, which will run from Oct. 17 to Oct. 30, 2017. Minimum denominations have been set for P50,000 and increments of P10,000 thereafter,” it said.
LTNCDs are considered an effective way for banks to raise cost-effective funding, while offering a new investment product to their own deposit base, most of whom are looking for long-term assets that provide higher yields than traditional time deposits.
HSBC and Standard Chartered Bank were tapped as joint lead arrangers and bookrunners and would also act as selling agents together with Security Bank and Multinational Investment Bancorporation.
Security Bank said to further promote the investment instruments, it would hold a multi-city roadshow, starting in Park Inn by Radisson in Clark, Pampanga on Oct. 17, Park Inn by Radisson in Davao on Oct. 18 and Marco Polo Plaza in Cebu on Oct. 19.
It asked interested investors to attend these briefings to know more about Security Bank’s recent developments and performance, and better understand the terms and conditions of the CDs by reaching out to tSecurity Bank branches or any of the selling agents.
Security Bank will list the CDs at the Philippine Dealing and Exchange Corp. to provide secondary market liquidity to investors who would like to trade the instruments.
Security Bank signed a strategic partnership with The Bank of Tokyo-Mitsubishi UFJ Ltd., the largest bank in Japan and a member of the Mitsubishi UFJ Financial Group last year to help the local bank achieve accelerated growth through capital infusion and business collaboration.
BTMU invested P36.9 billion representing a 20-percent equity stake in Security Bank.
Security Bank ranked as the fifth largest lender with P775 billion in assets and 5th in terms of capital with P101 billion as of June 30, 2017.
Security Bank also ranked fifth in return on shareholders’ equity at 10.6 percent, second in asset quality and second in NPL reserve cover.
Security Bank registered a net income of P8.6 billion and a return on equity of 10.4 percent in 2016.