PSBank to raise P3B from 10-year notes

Posted on December 18, 2013

PHILIPPINE SAVINGS Bank (PSBank) -- the thrift banking arm of the Metrobank Group -- is set to issue P3 billion worth of Basel III-compliant debt notes.

In a disclosure to the stock exchange yesterday, PSBank said its “board of directors passed a resolution approving the bank’s issuance of P3 billion in unsecured subordinated debt.”

The sale is still subject to the approval of the Bangko Sentral ng Pilipinas (BSP).

“The purpose of this issuance is to increase and strengthen PSBank’s capital base in anticipation of the early adoption of Basel III to be implemented by the BSP in 2014,” it said.

Starting January 2014, the BSP is requiring banks to maintain a capital adequacy ratio (CAR) of at least 10%, common equity Tier 1 capital of at least 6% and Tier 1 capital of at least 7.5%. Several domestic banks have already conducted capital-raising programs ahead of the deadline.

The proceeds will also be used to finance PSBank’s expansion plans, the disclosure said.

The notes will have a tenor of 10 years and a call option on the fifth year. It will also have a loss-absorption feature to comply with the central bank’s Basel III guidelines.

Last year, PSBank already raised P3 billion from the sale of Tier 2 notes. The issuance was also done to strengthen the bank’s capital base and fund its expansion plans.

PSBank saw its net income surge 82.39% to P3.21 billion as of September from P1.76 billion last year.

Its CAR -- a measure of a bank’s financial strength -- stood at 18.4% as of September, well beating the 10% minimum. Its Tier 1 CAR also exceeded the 7.5% requirement at 15.2%.

PSBank’s shares closed at P133 apiece yesterday, losing 50 centavos from their P133.50 finish on Monday. -- Diana Jean B. Evite