BanCommerce CAR increases to 16% with Tier 2, NPA sale

The Bank of Commerce (BanCommerce) has conducted roadshow presentations in Mindanao and the Visayas, and will make its final presentations in Luzon including Metro Manila this week to prospective clients following the approval by the Monetary Board, the policy-making body of the Bangko Sentral ng Pilipinas (BSP), for its P1.1-billion unsecured subordinated notes under the Tier 2 capital.

The Tier 2 capital-raising exercise compliments the successful sale of P1.6 billion worth of bad assets through the special purpose vehicle (SPV) route two weeks ago.

And recently, it obtained a PRSA rating for its debt instrument from Phil Ratings, a local rating firm. It was stressed that PRSA rating is one of the highest credit rating given by the local rating firm.

BanCommerce executive vice president and treasurer Mario J. Padilla said that upon the sale of the debt notes, the bank’s capital adequacy ratio (CAR) would improve to over 16 percent from the present 12 percent. The Bangko Sentral ng Pilipinas (BSP) wants banks to maintain a minimum CAR of 10 percent.

Seling agents are Deutsche Bank, Multinational Investment Bancorporation, and BanCommerce.

Padilla explained that proceeds from the flotation would be used for lending, investing, debt payments as well as ungrading or rationalizing its 112 branches nationwide.

"We would like to reduce our non-performing loan (NPL) ratio from a high of 16 percent to just nine percent by end 2005," he added. – TPT