Security Bank to launch P5-B LTNCTD

MANILA, Philippines - Security Banking Corp. will launch its first issuance of long-term negotiable certificates of time deposit (LTNCTD) amounting to at least P5 billion.

Security Bank executive vice president and treasurer Rafael S. Algarra Jr. said the principal reason for the issue is to match long-term liabilities with long-term financing.

“Our loan book has been expanding, and the bank wants to make sure it has the equivalent financing,” Algarra said.

Last week, the Bangko Sentral ng Pilipinas (BSP) approved Security Bank’s plan to issue the LTNCTD.

“The issue size is up to P5 billion, with minimum deposits of P50,000 and succeeding increments of P1,000. It has a minimum maturity of five years and three months up to a maximum of seven years,” the bank said.

Lead underwriters for the issue are Deutsche Bank and Standard Chartered Bank.

“It is basically strengthening our loan book financing,” Algarra added.

Last June, Security Bank acquired thrift bank Premiere Development Bank for P1.3 billion, another first for the medium-sized commercial bank.

At the end of September, the bank’s balance sheet expanded to P196.8 billion or 36.2 percent higher than the same period in 2010 due mainly to customer loans and trading and investment securities.

The previous year’s loan portfolio was recorded at P74.5 billion.

Asset quality numbers continue to remain at industry-best with non-performing loans (NPL) ratio and cover of 0.9 percent and 338 percent, respectively.

Its capital adequacy ratio (CAR) stood at 18.3 percent as the bank strove to maintain a fundamentally sound capital base, allowing for further expansion and growth.

Credit rating agency Capital Intelligence upgraded Security Bank’s long-term foreign currency rating to BB from BB-. It likewise affirmed the bank’s short-term foreign currency rating of B. These achievements strengthen the bank’s profile among local and international peers as it continues to receive various awards such as Best Banking Group in the Philippines.

The bank reported a 21-percent increase in net income in the first nine months of 2011, from P3.3 billion in the same period last year to P4 billion. It likewise retained its high return on equity (ROE) of 20 percent.