PBCom plans P2-B bond issuance


PBCom plans P2-B bond issuance

By James A. Loyola

Philippine Bank of Communications (PBCom), a lender controlled by businessman Lucio Co, is raising at least P2 billion from the first tranche of its peso-denominated bond program.

In a disclosure to the Philippine Stock Exchange (PSE), the bank said its Board of Directors has approved the PBCom’s P15 billion peso-denominated bank bond program which will be issued in multiple tranches.

The bonds will have a minimum tenor of 1.5 years, to be determined depending on market demand, while the interest rate will be determined based on the prevailing market rates.

Proceeds from the bond issuances will be used by the bank for general corporate purposes, including the refinancing of debt obligations, diversify funding sources, and support loan growth.

"The Bond Program will support the Bank’s growth objective while simultaneously achieving diversification of its funding structure as well as reduce dependency on short-term funding sources," the bank said.

In the same meeting, the PBCom Board of Directors likewise approved the first tranche issuance from the Bond Program with a target amount of at least P2 billion with an oversubscription option. 

“Actual issuance of bonds under the Bond Program shall be subject to regulatory approvals and market conditions,” the bank said.

PBCom registered a net income of P1.4 billion as of the third quarter of the year 2023, 5.4 percent higher than the P1.3 billion earned during the same period last year. 

The bank said this is attributable to P229.7 million higher operating income largely from P346.9 million better trading performance.

Interest income expanded by 41 percent to P5.7 billion due to higher asset yields and growth in both loan and securities portfolios. Interest expense, however, also increased to P2.2 billion on the account of higher cost of funds due to current high interest rates environment and caused a P1.8 billion decline in net interest income.

Total operating expenses went up by P99.4 million mainly because of volume-driven costs higher GRT, higher DST and PDIC insurance from growth in deposit volume, and higher manpower costs, offset by lower provision for impairment losses and lower depreciation and amortization. 

Income taxes also increased by P62.1 million, mainly from higher final taxes on interest income on peso government securities and onshore income and lower DTA recognized.