Security Bank to raise P20B

Security Bank Corp. is raising up to P20 billion from the issuance of high-yielding long-term deposit notes to fund expansion plans.

In a disclosure to the Philippine Stock Exchange on Monday, Security Bank said its board of directors had approved a plan to raise this amount through the issuance of long-term negotiable certificates of deposit (LTNCDs).

The bank said the proceeds from the planned LTNCDs would be used to fund its expansion of earning assets in the coming periods as well as provide customers and investors with suitable investment products.

LTNCDs are negotiable certificates of time deposits and are tax exempt for qualified individuals if held for at least five years.

The LTNCDs are insured by the Philippine Deposit Insurance Corp. (PDIC) up to a maximum coverage per depositor, currently at P500,000.

These are bank products with long tenors, usually five to 10 years, which are offered to investors looking for a higher interest rate compared to regular savings accounts or shorter-term deposits.

Security Bank is the eighth largest private domestic universal bank in the country with total assets of P377 billion.

It is the seventh largest in loans with a portfolio of P166 billion, and the eighth largest in capital at P42 billion as of end-March 2014.

The only one among the country’s largest banks that chalked up a higher profit in the first quarter compared to last year, Security Bank aims to sustain a return on equity of at least 12 percent this year.