Security Bank Tier 2 notes offer competitive rates

Rated "BB-" by international rating agency Fitch Ratings, Security Bank Tier 2 notes will be priced at a spread of at least 1.125 percent over the rate of the benchmark five-year fixed-rate treasury notes prevailing at the end of the offering period. The offering period will end today.

The Tier 2 notes will raise the bank’s total capital to around P12.5 billion. It will also bring its capital adequacy ratio, a measure of its ability to cover risks, to 19 percent from 14.5 percent.

Security Bank president Alberto Villarosa said the bank does not need the additional capital but is going to the market with its notes to further strengthen its balance sheet and have the flexibility to pursue other business initiative.

Villarosa said the bank is looking at an aggressive growth in the coming years. "There are exciting times for the bank. The Tier 2 notes offering is one of the first initiatives that propels us in the right direction," he said.

"The performance of the bank speaks for itself. We have one of the lowest NPL (non-performing loan) ratios. We have margins. For every peso we generate, we spend only 52 centavos in operating costs compared to 62 (centavos) for other banks," Villarosa said.

"We have a very strong balance sheet. We have strong earnings. We are now among the country’s 10 biggest banks in terms of total assets, deposits, loans, and capital and we aim to move up by being more efficient, competitive, and client-friendly," he said.

Security Bank, controlled by the family of its chairman, Frederick Dy, has a NPL cover of 56 percent, better than the industry average of 50.6 percent.