Local banking giant Security Bank Corp. plans to raise up to P20 billion through the offering of high-yielding long-term deposit notes, harnessing ample liquidity in the financial system to fund expansion plans.
In a disclosure to the Philippine Stock Exchange yesterday, Security Bank said its board of directors had approved the issuance of long-term negotiable certificates of deposit (LTNCDs).
The issuance will be subject to regulatory approval, the bank said.
The last time the bank tapped the LTNCD market was in 2014.
LTNCDs are negotiable certificates of time deposits. They are tax exempt for qualified individuals if held for at least five years. The LTNCDs are insured by Philippine Deposit Insurance Corp. (PDIC) up to the maximum coverage per depositor, currently at P500,000.
These are bank products with long tenors, usually five to 10 years. They are offered to investors looking for higher yields compared to regular savings accounts or shorter-term deposits.
In the first semester, Security Bank posted P5.2 billion in net income, 8 percent higher than year-ago level. This was driven by a 26-percent year-on-year increase in net interest income to P9.3 billion. Non-interest income, including trading gains, also rose by 15 percent year-on-year to P2.9 billion.
As of end-June, Security Bank had total assets worth P775 billion, up by 26 percent from the level in the same period last year.
Shareholders’ capital amounted to P101 billion, up by 7 percent year-on-year.