EastWest redeems P1.5B in debt notes

GOTIANUN-LED East West Banking Corp. has obtained approval from the Bangko Sentral ng Pilipinas to redeem P1.5 billion worth of debt notes ahead of their 2021 maturity.

The bank is exercising its call option on these unsecured subordinated debt notes on Jan. 2, 2016, the bank told the Philippine Stock Exchange on Thursday.

The debt notes were issued in 2010 at a coupon rate of 7.5 percent per annum. These were supposed to mature on Jan. 2, 2021.

EastWest senior vice president and chief finance officer Rene de Borja Jr. said the redemption was consistent with the bank’s capital management plan.

“We are exercising our option to call the notes since this does not qualify anymore as regulatory capital under the current Basel 3 requirements. The bank has sufficient capital and funding to exercise the call,” he said.

The Basel 3 capital adequacy framework introduces a complex package of reforms designed to improve the ability of banks to absorb losses. This framework also extends the coverage of financial risks and puts in place stronger firewalls against periods of stress.

The bank raised early this year P8 billion in fresh capital from the sale of new shares to existing shareholders.

One of the country’s fastest growing banks, EastWest Bank reached a new milestone as its total assets reached the P200-billion mark as of end-June 2015. Its total assets grew by 31 percent year-on-year to P204.9 billion, propelled by the 23-percent expansion in loans to P131 billion.  Deposits, on the other hand, grew by 25 percent year-on-year to P158.1 billion. Doris Dumlao-Abadilla