SECURITY BANK Corp. received regulatory approval to issue up to P20 billion through long-term certificates of deposit (LTNCD) to raise fresh funds.
In a disclosure to the local bourse on Tuesday, Security Bank said it was authorized by the Bangko Sentral ng Pilipinas to issue up to P20 billion in LTNCDs in multiple tranches. The approval was embodied by the Monetary Board Resolution No. 828 dated May 30.
Like regular time deposits 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.”
On March 26, Security Bank’s board directors approved the issuance of up to P20 billion in long-term papers in multiple tranches.
In a previous press conference, outgoing Security Bank President and Chief Executive Officer (CEO) Alfonso L. Salcedo, Jr. said the LTNCDs will likely be issued “within the second half” of the year.
The last time the bank issued LTNCDs was in May last year, wherein it raised P5.8 billion, marking the second tranche of its P20-billion program and following the P8.6 billion raised in November 2017.
Apart from the LTNCDs, Security Bank seeks to redeem P10 billion in unsecured subordinated debt notes in July ahead of their maturity date in 2024.
Last week, Security Bank announced Sanjiv Vohra as the new president and CEO of the bank effective July 1, replacing Mr. Salcedo who will be retiring from his post.
Prior to his new role, Mr. Vohra served as the managing director, head of global corporate banking (Asia and Oceania) and co-head of investment banking (Asia and Oceania) of MUFG Bank, Ltd., Security Bank’s strategic partner.
MUFG Bank has a 20% stake in Security Bank.
Security Bank posted a net income of P2.38 billion in the first quarter of the year, up 1.5% versus year-ago level.
The bank’s shares closed at P170.10 apiece on Tuesday, dropping P3.90 or 2.24% from the previous day’s finish. — K.A.N. Vidal