Security Bank seeks to raise P5B from time deposit certificates

Lender Security Bank Corp. has rolled out a new offering of high-yielding deposits, seeking to raise at least P5 billion to better manage liabilities while expanding its funding and investor base.

The long-term negotiable certificates of deposits (LTNCDs) will have a tenor of five years and six months.

They are being pitched to investors at an indicative rate of 3.875 percent a year, the bank said in a press statement.

The base offer of P5 billion can be upsized, depending on the demand for the offering, which will run until Oct. 30.

To drum up interest in the offering, the bank is conducting a multicity roadshow covering Pampanga, Davao and Cebu.

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.

In a press statement, Security Bank said LTNCDs had been an “effective way for banks to raise cost-effective funding, while offering a new investment product to their own deposit base, most of whom are looking for long term assets that provide higher yields than traditional time deposits.”

The Security Bank group had a total of 296 branches all over the country and 667 automated teller machines as of August. It ranks as the fifth largest listed bank in terms of total assets and capital, respectively amounting to P775 billion and P101 billion. —DORIS DUMLAO-ABADILLA