Chinabank cues P100-B fundraise

China Banking Corp. (Chinabank) will raise up to P100 billion via the bond market and commercial papers in the next three years to bankroll its expansion plans amid expectations of further monetary policy easing ahead.

In a stock exchange filing on Thursday, the Sy family-led bank said its board of directors had approved the fundraising exercise that would be done “in several tranches.”

The activities might involve either retail bonds or commercial papers, or both, it noted.

Compared to retail bonds, commercial papers are short-term debt instruments that help companies quickly raise funds while reducing risk for investors, with maturity ranging from one to 270 days. However, these are considered unsecured debt instruments.

“The proceeds shall be used to support the bank’s strategic initiatives and expansion programs,” Chinabank said in its disclosure.

This comes as the market anticipates the Bangko Sentral ng Pilipinas to further cut interest rates this year. Lower rates typically result in more demand for loans due to lower borrowing costs.

Monetary policy easing and a better macroeconomic environment buoyed Chinabank’s profits in the first nine months of 2024 by 13 percent to a record P18.4 billion.

The lender’s loan portfolio during that period grew by 14 percent to P871.6 billion, owing to heightened demand after the central bank reduced its key rate for overnight borrowing for the first time in nearly four years.

Chinabank’s nonperforming loans ratio eased to 1.8 percent from 2.2 percent, signaling better asset quality as bad loans declined.

As of end-September, total assets at the country’s fifth-largest bank reached P1.6 trillion.

Early last year, Chinabank, one of the banking units of conglomerate SM Investments Corp., underwent a brand refresh in hopes of making its image “more resonant and engaging” to a younger generation of clients.

Its branches across the country have since replaced their signages to show Chinabank’s new logo.

The bank likewise changed its stock symbol to “CBC” from “CHIB,” which had been its ticker since its debut on the local bourse in 1927.