EastWest raises P2.7 B from LTNCD issuance

MANILA, Philippines - Listed East West Banking Corp. successfully raised P2.7 billion from the issuance of long term negotiable certificate of deposits (LTNCDs) to take advantage of the liquidity in the financial system.

EastWest president and CEO Antonio Moncupa Jr. told reporters during the listing of the LTNCDs due 2022 at the Philippine Dealing & Exchange Corp. (PDEX) yesterday the issuance of the high yielding long-term deposits allows the bank to manage its funding risks.

LTNCDs are time deposits but have longer maturity and carry higher yields. Unlike regular time deposits, LTNCDs could not be pre-terminated but could be sold to other investors in the secondary market.

Moncupa said the bank’s board of directors approved the issuance of P10 billion worth of LTNCDs in August to bankroll its working capital and expansion program.

The issuance of the balance of the LTNCD offering, he explained, would be in tranches but would be completed within the year.

Aside from the LTNCD offering, Moncupa said the bank is looking at issuing Tier 2 capital notes as it remains open to take in new investors and is on the look out for potential acquisitions.

“The board is taking mind of all possibilities. The agenda is how do we accelerate the maturity and how do we make EastWest a more significant bank in the industry,” Moncupa said.

According to Moncupa, the assets of the Gotianun-led bank currently stands at around P300 billion while its equity is pegged at P34 billion.

“We have to pump in more equity given our infrastructure and that means getting strategic partner and exploring alliances or cooperation agreements. I think the board is open to that and we’re not closing any possibilities,” he said.

Earnings of EastWest jumped 70 percent to hit a new record high of P3.4 billion last year from P2 billion in 2015 high as the universal bank continued to be consumer-oriented through an aggressive branch expansion program that started in 2012.

“I don’t think any company could sustain 70 percent growth in profit for a long time but we expect better times ahead for EastWest,” he said.