By Karl Angelo N. Vidal
ROBINSONS BANK Corp. is set to raise P3.5 billion through issuance of long-term negotiable certificates of deposit (LTNCD) next year to fund the expected growth of its lending segment.
In a text message, Robinsons Bank President and Chief Executive Officer Elfren Antonio S. Sarte said the Gokongwei-led bank is set to offer LTNCDs with an issue size of P3.5 billion.
The long-term notes will be offered in the first half of the year, which will constitute the second tranche of its P5-billion LTNCD program approved by the central bank.
Mr. Sarte added that the proceeds of the fundraising activity will be used “to fund the expected growth of our lending business.”
In the first half of the year, the commercial bank saw its net profit surge to P201.8 million, up 33.9% from the same period last year.
This was driven by the expansion of its loan book, which grew 43.5% to P59.7 billion year-on-year.
In July, the bank raised P1.78 billion from the first tranche of its long-term notes program, which will mature in 5.5 years and carry an interest rate of 4.875% to be paid quarterly.
Like regular time deposit offered by banks, LTNCDs offer higher interest rates. However, LTNCDs cannot be pre-terminated but can be sold on the secondary market, making them “negotiable.”
A number of banks have been raising additional capital ahead of tighter requirements from the central bank under the international Basel 3 standards, which will take effect next year.
Other lenders such as Philippine Bank of Communications, Metropolitan Bank & Trust Co. and Rizal Commercial Banking Corp. also offered LTNCDs recently to support their funding needs.
Robinsons Bank is licensed as a commercial lender and is the 19th biggest in the industry in asset terms as of end-June.
The lender is looking to scale up to be a universal bank and eventually go public.