PBCOM raises P2.9B via LTNCD offering

Retail magnate Lucio Co-led Philippine Bank of Communications has raised over P2.9 billion from a maiden offering of high-yielding deposits, boosting its capability to lend to consumers and businesses.

The long-term negotiable certificates of deposit (LTNCDs) will be due in 2024 and carry an interest rate of 5.625 percent a year, payable quarterly, PBCom said in a recent statement.

PBCom intends to use the proceeds from this offering for general corporate funding, especially long-term lending.

The bulk of the amount came from PBCom’s own branch network, which bank president Patricia May Siy cited as a “vote of confidence in the bank’s growth story from its strong customer base.”

These LTNCDs were recently listed on the country’s fixed income trading platform Philippine Dealing Exchange.

The amount was more than the initial planned volume of P2 billion, the bank said.

LTNCTDs are negotiable certificates of time deposit issued by banks. They usually have higher yields compared to regular time deposits or savings accounts.

Unlike regular time deposits, LTNCTDs cannot be pre-terminated by holders. However, investors can negotiate or transfer their holdings in the secondary market prior to maturity. Interest on LTNCDs is tax-free for individual investors if the instrument is in the name of the individual holder and is held for at least five years.

At present, PBCom ranks 20th largest among the country’s 43 commercial and universal banks with assets of some P99 billion. It is valued by the stock market at about P11.4 billion.

The LTNCD offering is the maiden issuance for PBCom, which has been in the banking industry for almost 80 years.

Tycoon Lucio Co, founder of the Puregold retailing group, acquired control of the bank in 2014. —DORIS DUMLAO-ABADILLA