China Bank plans P20B fund-raising

SY family-led China Banking Corp. plans to raise as much as P20 billion from the sale of high-yielding deposits, supporting its strategic initiatives and business expansion.

In a press statement, China Bank said it would apply for a shelf program to issue long-term negotiable certificates of time deposits (LTNCD).

The issue will be in tranches of P5 to P10 billion each with tenors ranging from five to seven years. The timing will be subject to regulatory approvals and tranche issue size and implementation will depend on prevailing market conditions.

China Bank expects to tap existing clients and depositors for distribution of the LTNCD.

LTNCDs are time deposits that have longer maturity and are higher yielding than regular
deposits. These instruments are negotiable and insured with the Philippine Deposit Insurance
Corp. up to a maximum coverage which is currently at P500,000 per depositor.

The last time that China Bank entered the LTNCD market was in 2008 when it sold five-year P5 billion LTNCD in an offering that was oversubscribed in only two days.

For this latest offering, the bank’s board had granted the management committee to appoint the arranger/s and required third parties and approve commercial terms of the issue.

This issuance is expected to expand the bank’s long-term deposit base and boost its long-term asset growth.

China Bank continues to be one of the country’s biggest banks with a total capital adequacy ratio of 12.28 percent. It is the eighth largest publicly-listed bank in market capitalization currently amounting to around P77 billion.

Meanwhile, the bank announced that its investment banking arm China Bank Capital Corp., has completed its first full year of operations and recently established two additional subsidiaries to complete its suite of investment banking services. China Bank Securities Corp.,, a wholly-owned stock brokerage house and CBC Assets One (SPC) Inc., a special purpose corporation subsidiary,
are seen to round out China Bank Capital’s offerings and help improve its capability to create new products.

Founded in 1920, China Bank is the country’s first privately owned local commercial bank in the Philippines providing a full range of banking products and services to corporate, commercial, and retail customers through over 500 branches nationwide (includes thrift bank subsidiary, China Bank Savings CBS).

China Bank has won the PSE’s “Bell Award” for corporate governance in the last four years since the annual awards were launched by the local bourse.