MANILA, Philippines — Philippine Savings Bank, the thrift banking arm of the Metrobank group, plans to raise P3 billion from the sale of debt notes qualifying as capital under the more stringent Basel 3 capital adequacy framework.
In a disclosure to the Philippine Stock Exchange on Tuesday, PSBank said its board recently passed a resolution approving the bank’s issuance of unsecured subordinated debt notes with a term of 10 years and a call option on the 5th year, subject to the approval of the Bangko Sentral ng Pilipinas.
The debt notes will have a loss-absorption feature to comply with the BSP circular on the Basel 3 implementing guidelines on minimum capital requirements.
“The purpose of this issuance is to increase and strengthen PSBank’s capital base in anticipation of the early adoption of Basel 3 to be implemented by the BSP in 2014; and also allow the bank to freely pursue its expansion plans,” the bank said.
Basel 3 framework, which introduces a complex package of reforms designed to improve the ability of banks to absorb losses, extends the coverage of financial risks and has stronger firewalls against periods of stress.
In the first nine months of the year, PSBank grew its net profit by 82 percent to a record-high P3.2 billion. This was attributed to the continued expansion of its loan portfolio and gains from its investment portfolio.
The bank ended September with a 21-percent year-on-year increase in equity to P17.6 billion. This translated to a capital adequacy ratio of 18.4 percent and tier 1 capital ratio of 15.2 percent, well above the 10 percent regulatory minimum and the Basel III requirements set for implementation in 2014.
The bank’s distribution network includes 222 branches as well as 537 onsite and offsite ATMs (automated teller machines) all over the country.
PSBank and its parent bank Metrobank are the first Philippine banks to be certified for ATM acceptance of EMV-enabled MasterCard chip cards. The EMV technology significantly improves ATM security for its cardholders.