AUB raising P5B from sale of debt paper

Asia United Bank, the banking arm of the Rebisco group, is raising about P5 billion from the sale of debt notes qualifying as tier 2 or supplementary capital.

In a disclosure to the Philippine Stock Exchange, AUB said its board had approved the issuance of tier 2 notes “to support the growth strategy of the bank.”

AUB president Abraham Co said the bank would raise about P5 billion, adding that the notes would have a call option in five years.

Co said the proceeds would be used by the bank to support loan growth. The bank is expecting to grow its loan book by 25 percent annually over the medium term.

The disclosure said the terms and conditions of the issuance would be determined after a full review by the bank’s authorized officers and would be subject to the approval of the Bangko Sentral ng Pilipinas.

AUB and its subsidiaries posted a net income of P448.9 million for the first quarter of 2015, 119-percent higher than a year ago. Its bottom line was boosted by a double-digit growth in interest income from loans as well as a strong rebound in trading and investments.

The bank’s loan portfolio in the first quarter grew by 39 percent year-on-year to P73 billion.