PHILIPPINE SAVINGS Bank (PSBank) said it will raise funds through long-term negotiable certificates of time deposit (LTNCD) to expand its consumer banking segment.
In a chance interview, PSBank President Jose Vicente L. Alde said the bank will offer LTNCDs in preparation for the lender’s customer business expansion brought about by its “robust” growth.
“[Proceeds of the fund will go to the] expansion of the consumer business,” Mr. Alde told BusinessWorld on the sidelines of the Chamber of Thrift Banks general membership meeting on Friday.
“We have been growing our consumer business for past years, and we still expect the consumer business to be robust in the next years, so we’re preparing for that expansion.”
Mr. Alde said the bank will expand its retail arm by growing its traditional and digital channels.
“One is the traditional channel which are the branches. And of course, we’re looking at [improving our] digital channels,” he said.
Mr. Alde said the savings arm of listed Metropolitan Bank & Trust Co. is “looking at opportunities” on when to open branches. Currently, he said, PSBank has 250 branches.
Aside from opening new branches, Mr. Alde said proceeds from the LTNCD offering will also be used to strengthen and expand PSBank’s digital channels.
“[We started with] online loan application for auto loan application and personal loan applications. That’s one avenue that we’re looking at.”
Last month, PSBank announced its plan to raise up to P15 billion through the sale of LTNCDs in two or more tranches targeted to be completed over a year. The debt instruments will carry a tenor of five-and-a-half years.
“[We’re] in the process of getting approvals. There are no details yet, but we’re looking at the P15-billion issuance. We will have to wait for [regulatory] approval,” said Mr. Alde.
Meanwhile, the PSBank official said digitization will also help bring its products to more potential clients, in line with the central bank’s financial inclusion thrust.
Mr. Alde added that the lender is “reviewing” the use of agency banking to reach more clients.
Early last year, the Bangko Sentral ng Pilipinas allowed banks to hire “cash agents” which are allowed to accept and disburse cash as well as facilitate online self-service deposits, withdrawals and fund transfers in behalf of the lender. These cash agents, according to the central bank, are typically cash-rich entities that conduct business such as convenience stores and pharmacies.
PSBank shares gained 50 centavos or 0.58% to close at P86.50 apiece on Tuesday. — Karl Angelo N. Vidal