BPI raises P3 billion from LTNCDs

BANK OF THE Philippine Islands (BPI) has raised over P3 billion from long-term negotiable certificates of time deposit (LTNCTD), which it listed on the Philippine Dealing and Exchange Corp. (PDEx) on Friday.

The papers were priced on Oct. 4 at 4% per annum payable quarterly, which is at a discount of 34.7 basis points from the five-year Bloomberg Valuation Service (BVAL) Reference Rates on the pricing date, the bank said in the disclosure on Friday. The LTNCDTs have a tenor of five-and-a-half years and were offered from Oct. 4-18.

“This capital raise will help finance the growth of a loan book that, with every passing quarter, becomes a bit more green, a bit more sustainable,” BPI President and CEO Cezar P. Consing said in the statement.

LTNCTDs are like regular time deposits that offer higher interest rates but cannot be pre-terminated by holders.

However, the notes can be traded on the secondary market prior to maturity, making them “negotiable.”

Hongkong and Shanghai Banking Corp. Ltd. was the sole arranger and participating selling agent of the LTNCTDs, while BPI Capital Corp. was the sole selling agent.

The issuance is part of the bank’s P50-billion LTNCD program approved by the central bank last month and is BPI’s third foray into the capital markets for the year.

BPI last month issued $300 million in ASEAN green bonds and two-year 100-million Swiss franc-denominated negative-yielding green bonds as part of its $2-billion medium-term note (MTN) program established in June last year.

In its maiden drawdown from the MTN, BPI raised $600 million in August last year via five-year senior unsecured fixed-rate bonds quoted at 4.25%.

BIGGEST BRANCH
Meanwhile, BPI opened its biggest branch in the country located in Makati on Thursday, with further expansion set by December 2020.

The lender is also looking to replicate the 2,943-square-meter branch which caters to both retail and high net worth individuals, according to Mr. Consing.

The Makati main branch of BPI has dedicated areas that cater to retail customers, preferred clients with at least P500,000 in deposits, and a private banking lounge, which will serve clients with at least P25 million in deposits.

“I think this is the biggest for us in the Philippines. I’m hoping we can replicate this in a few other urban centers,” Mr. Consing said.

Despite using new technologies as a quarter of their clients are increasingly using online banking, Mr. Consing said the new branch will also cater to clients who are more at home with traditional banking. This, according to him, makes the branch both high-tech and “high touch.”

“The reason you find a lot of spaces here and a lot of meeting rooms…and a lot of lounges is [because] there are a lot of people that really want to sit down and talk can have a dialogue and get advice and there are a lot of people who just want to do everything on the phone.. We just want to make sure that we can cover a wider spectrum as we can,” he told reporters.

Moreover, Mr. Consing said although the trend in the banking industry outside the country is to go digital rather than to open more branches, the local setting is still keen on opening more branches amid the low penetration rate in the country.

According to him, the country has an average of about nine to 10 branches for every 100,000 people, which is still lower compared to its regional peers where there are 12-15 bank offices for every 100,000 people.

“When you get to the higher level of branch intensity, then you actually branch out coming down. So what we’re trying to do is we’re trying to balance digital with brick-and-mortar, we need both,” he said.

The CEO said the bulk of BPI’s branches are in Central Luzon due to demand in the area.

“I think next year, we’ll do maybe 20 to 25 [new] BPI and BPI Family bank branches,” Mr. Consing added.

Meanwhile, when asked about the construction of their new headquarters, Mr. Consing said they are still working to carefully bring down their old headquarters as there are buildings nearby.

“It will take a few years [to construct a new headquarters] but we’ll spend the next year actually taking [down] the old building. I think it [new headquarters] will be much more people-friendly and it will be more green,” Mr. Consing added.

The lender saw its net income rise by 38.6% year-on-year to P8.29 billion in the third quarter, bringing its bottomline for the first nine months to P22.03 billion, a 29.5% jump from the P17.01 billion it booked in the same period a year ago.

BPI’s shares rose 1.9% or P1.85 to P99 apiece on Friday. — Luz Wendy T. Noble