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China Bank eyes P75B via bond issuance

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CHINA BANKING Corp. (China Bank) will raise up to P75 billion through the issue of peso-denominated securities to support its initiatives and expansion.

In a disclosure to the local bourse on Thursday, the Sy-led bank said its board of directors approved on Wednesday the issuance of up to P75 billion in retail bonds or commercial papers.

The fund-raising activity will be conducted in several tranches within the next three years.

“The proceeds shall be used to support the bank’s strategic initiatives and expansion program,” China Bank said in the regulatory filing.

It added that the P75-billion corporate bond program is in line with the lender’s intention to be an active participant in the ongoing expansion of the country, as well as the government’s infrastructure initiatives.

In a bid to deepen capital markets, the central bank in August simplified the process for lenders to raise fresh funds through bonds, removing the requirement to secure regulatory approval.

Big banks such as BDO Unibank, Inc., Metropolitan Bank & Trust Co., as well as Bank of the Philippine Islands have already raised fresh capital via bonds to diversify funding sources and expand their businesses.

Security Bank Corp. and Philippine National Bank have also established their own peso-denominated bond programs worth P50 billion and P100 billion, respectively, which will also be issued through tranches.

In July, China Bank raised P10.25 billion from the first tranche of its P20-billion long-term negotiable certificates of time deposit program, with the proceeds be used to support expansion and other initiatives.

The sixth-biggest commercial bank in the country booked an P8.1-billion net income in 2018, up 7% from the P7.4 billion tallied in 2017, propelled by sustained growth of its core businesses.

Shares in China Bank closed at P26.85 each on thursday, up five centavos or 0.19%. — Karl Angelo N. Vidal

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