BSP approves UCPB's P3-billion long-term paper

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) has approved the proposed P3-billion long-term negotiable certificates of deposit (LTNCD) issue of the United Coconut Planters Bank (UCPB).

UCPB executive vice president and treasurer Eulogio Catabran said with the BSP approval, the bank and its financial advisor are now working on the pricing and timing of the offer.

Citicorp Capital Philippines Inc. has been tapped to arrange the LTNCD offering while Multinational Investment Bancorporation, Citicorp Financial Services and Insurance Brokerage Philippines Inc., and UCPB will act as selling agents.

LTNCDs are similar to time deposits except that they have longer maturities, usually a minimum of five years and one day, which make them tax-exempt. They also cannot be pre-terminated unlike regular time deposits. However, they are negotiable, meaning they can be sold to other investors or used as collateral for loans.

Catabran said the bank will use the proceeds from the issue to beef up further its deposit base and accelerate the expansion of long-term assets, mainly loans to the middle market and the consumer sector.

“UCPB has been aggressively growing its deposits and loans to drive earnings growth,” he said.

Catabran added that the LTNCD offering would appeal particularly to individual investors, who stand to benefit the most from the tax-exempt earnings of the investment.

He said that it would also generate keen interest from corporates and institutional investors looking for alternative low-risk but high-yield investment outlets to diversify their investment portfolios.

As of June 30, 2010, UCPB was ranked 12th largest bank in the country in terms of total assets with P170 billion.

The bank has 178 branches and 237 ATMs nationwide and is adding five more branches and 13 ATM sites before the year ends.

Last year, UCPB recorded a net income of P1.46 billion, or a full recovery from the P1.67-billion net loss in 2008, as revenues surged on higher deposits, loans and investments, and a huge gain from trading operations.

Revenues jumped 36 percent to P8.77 billion from P6.43 billion in the previous year, with both non-interest income and interest income registering double-digit growths.

Investments in government securities and liquid assets ballooned to P42.86 billion from P17.84 billion, and expanded the size of its loan portfolio by 16 percent to P41.34 billion from as more deposits poured in.

UCPB’s total deposits reached a record P133.68 billion in 2009, up by 40 percent from P95.78 billion a year earlier.