MANILA, Philippines - The Land Bank of the Philippines (Landbank), a government financial institution, is eyeing to raise $100 million through the issuance of Negotiable Certificates of Time Deposit (NCTD) to fund its expansion needs and to provide alternative investment options to investors.
The bank will offer the deposit product from Nov. 23 to Dec. 4, during which final terms of the offer will be announced, officials said during the weekend.
These certificates are senior deposit obligations of the bank which will have a maturity of three years. It is ideal for individuals and corporations that seek medium term investments with potentially higher returns than regular dollar time deposits.
Landbank said the NCTDs will be offered in minimum denominations of $5,000 and in increments of $1,000 thereafter, with interests to be paid quarterly until they mature in 2012.
As with other investment instruments, Landbank’s NCTDs are negotiable and transferable in the secondary market. Furthermore, the NCTDs will be covered by the Philippine Deposit Insurance Co. (PDIC), the state-owned deposit insurer, up to the specified limits or the equivalent of P500,000 per depositor.
Landbank, a 100-percent government-owned bank is mandated to spur countryside development and provide financial assistance to priority sectors such as farmers and fisherfolk, micro, small and medium enterprises, and other agri- and environment-related projects.
In the first nine months of 2009, Landbank posted a net income of P5.4 billion, a 41-percent increase versus the P3.8 billion net income registered in the same period last year due to higher loans.
Loans extended to its target sectors rose to P117.5 billion as of end-September 2009, higher by 18 percent from the P99.5 billion recorded a year ago.
With higher third quarter income, Landbank was able to maintain its rank among the country’s top five banks.
Its total assets expanded by 35 percent to P512 billion in September 2009 from P379.7 billion in September 2008, data from the bank showed.
Banks such as Landbank have been trying to maximize the cash-rich domestic financial system by offering alternative and potentially high-yielding investment products. Last September, Rizal Commercial Banking Corp. also offered dollar time deposits to investors.