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BPI plans LTNCTD offer

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Customers make bank transactions at a Bank of the Philippine Islands (BPI) branch in Makati, on May 24, 2013. -- BW FILE PHOTO

THE Bank of the Philippine Islands (BPI) will soon offer long-term notes to fund expansion plans and diversify its portfolio, after securing regulatory approval for the issuance.

In a disclosure, the Ayala-owned lender said the Bangko Sentral ng Pilipinas (BSP) has approved its planned issuance of P30 billion worth of long-term negotiable certificates of time deposit (LTNCTDs).

These instruments are similar to regular time deposits which offer higher interest rates. However, LTNCTDs cannot be pre-terminated. Instead, these are called “negotiable” because they can be sold at the secondary market for an investor to secure fresh liquidity.

BPI told the Philippine Stock Exchange on Thursday that the Monetary Board, which is the BSP’s highest policy-making body, gave the green light for the bank’s latest fund-raising initiative.

The country’s third-biggest bank in asset terms said they will proceed with the first tranche of the LTNCTD offering “within the year,” subject to prevailing market conditions.

Under BSP rules, any approved issuance of certificates of deposit must be offered and raised within one year from securing regulatory approval. The amount may be shored up from a succession of note offerings during the prescribed period.




“The issuance will support BPI’s expansion plans and diversify the bank’s funding sources,” the listed lender said in a statement.

BPI President and Chief Executive Officer Cezar P. Consing previously said that the bank is counting on organic growth to expand its businesses and bottom line. In July, the lender merged its thrift bank units BPI Direct Savings Bank, Inc. and BPI Globe BanKO (BanKO) into one entity as it seeks to tap into the micro, small and medium enterprise segment through microfinance.

Other big banks are also in the process of offering long-term papers to investors. The Philippine National Bank, Security Bank Corp., Union Bank of the Philippines, and the Metropolitan Bank & Trust Co. have rolled out their own fund-raising plans through separate note offerings.

BPI posted an P11.7 billion net income from January to June, down by 7.7% from the P12.6 billion booked during the same period in 2016 in the absence of one-off gains.

BPI shares closed at P98 apiece yesterday, up 50 centavos or 0.51% from P97.50 each on Wednesday. — Melissa Luz T. Lopez

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