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Robinsons Bank raises P5B via bonds

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A ROBINSONS Bank branch is seen in Ermita, Manila. — BW FILE PHOTO

ROBINSONS BANK Corp. raised P5 billion from its maiden bond offering amid robust investor demand, with the lender planning to issue the next tranche before the year ends.

Robinsons Bank President and Chief Executive Officer Elfren Antonio S. Sarte said the Gokongwei-led lender booked P10 billion in demand on the first day of its two-year bond offer.

“We only announced P2.5 billion. Our order for the first day reached P10 billion. The demand is strong,” Mr. Sarte said in an interview on the sidelines of bankers’ reception at the Bangko Sentral ng Pilipinas (BSP) headquarters on Friday.

In a separate text message on Sunday, Mr. Sarte said the bank “will no longer accept new placements as the issue is oversubscribed.”

The bank wanted to raise at least P2.5 billion via two-year fixed-rate bonds, with an oversubscription option of another P2.5 billion. The offer period started last July 26 and was supposed to end on Aug. 1.

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The two-year instruments carry a coupon rate of 5.125% per annum to be paid quarterly until 2021.

The fund-raising activity marks the maiden issue from the bank’s P10-billion corporate bond program. The bond issue’s proceeds are expected to support Robinsons Bank’s loan growth and improve its long-term funding position.

BDO Capital & Investment Corp. served as the sole arranger of the fund-raising activity. It also acted as a selling agent alongside Robinsons Bank and other financial institutions.

Mr. Sarte said the lender received overwhelming demand for its bond offer given the “good timing” of the offer and amid strong liquidity.

“The market is very liquid. And at the time we issued, there’s not much securities available,” he said.

The BSP completed its phased reduction in banks’ reserve requirement ratio last Friday, bringing it down to 16% for universal and commercial banks and six percent for thrift lenders, unleashing billions of pesos into the financial system.

Given the strong demand for the debt papers, Mr. Sarte said Robinsons Bank is looking at issuing the next tranche of bonds before yearend.

“I guess with the strong demand, we have to evaluate. Initially, the plan was next year, but we might advance before the year. Maganda naman response sa Robinsons Bank (The response was good),” Mr. Sarte added.

Robinsons Bank booked a P186.1-million net income in the first half of the year, 7.8% lower than P201.8 million it earned in the same period in 2018.

“Net income slightly decreased…due to revaluation loss on foreign exchange holdings amounting to P34.9 million as of June 2019,” Mr. Sarte said via text.

The bank’s net interest income stood at P1.75 billion, up 9.4% year-on-year.

Robinsons Bank’s loan portfolio stood at P68.9 billion as of end-June, 15.4% higher from the comparable year-ago period. On the funding side, total deposits were at P88.3 billion.

Still, the lender’s earnings before interest, taxes, depreciation, and amortization grew 17.8% to P461.2 million in the six months ended June from P391.5 million last year.

Overall, its assets stood at P120.8 billion at end-June, higher by 12.6% from June 2018 level.

Mr. Sarte said reaching the bank’s full-year income target “might be a stretch,” although it expects better earnings in the latter half of the year.

The bank set its 2019 income guidance at P756 million, more than double the P317.11-million net income booked in 2018.

“We expect our margins to improve in the second half of the year due to lower interest cost and better income from our treasury business,” Mr. Sarte said. — Karl Angelo N. Vidal

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