BSP approves P3-B UCPB offering

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) has approved the United Coconut Planters Bank’s planned offering next month of P3 billion worth of long-term negotiable certificates of time deposit (LTNCD).

This will be UCPB’s second LTNCD issuance in less than a year. The bank made a similar offering in November 2010, raising P4.5 billion, which was P1.5 billion or 50 percent over its original target.

“With the upbeat sentiments on local financial conditions, we see corporates and individuals continuing to go for long-term, low-risk investment outlets that provide regular earnings,” UCPB executive vice president and treasurer Eulogio Catabran said.

LTNCD are time deposits but have longer maturities of five years and carry higher yields. While they cannot be pre-terminated, unlike regular time deposits, they are negotiable so they can be sold at market prices to other investors through the secondary market.

UCPB will use the proceeds from this year’s offering to increase the bank’s long-term deposit base and finance the expansion of long-term assets.

“We expect demand for loans to remain strong particularly in the consumer sector where margins are higher,” Catabran explained.

UCPB tapped Citicorp Capital Philippines Inc. to arrange the new LTNCD offering and appointed Multinational Investment Bancorporation, Citicorp Financial Services and Insurance Brokerage Philippines Inc., Philippine Commercial Capital Inc., Rizal Commercial Banking Corp., and as itself as selling agents.

The commercial bank is presently in discussions with the advisors regarding pricing, yields and timing of the issue.

UCPB has been expanding its loan portfolio to drive earning growth. 

At of the end of March 2011, the bank’s total loans increased by P9.3 billion during the period, from P54.2 billion to P63.5 billion, with consumer loans growing at a fast 48.9-percent clip.   

Total deposits reached P148.6 billion, up by P15.5 billion or 11.6 percent from P133.1 billion a year ago.

Earnings from loans in the first three months of the year grew 28.9 percent year-on-year, pushing up the bank’s total interest income to P2.4 billion from P2.1 billion in the same period last year.

UCPB operates 183 branches nationwide and ranked 12th largest in terms of resources with total assets of P 179.6 billion as of the first quarter of the year.