The International Finance Corp. (IFC) has invested $100 million (over P5.8 billion) in City Savings Bank Inc.'s (CitySavings) maiden social bond issuance aimed at bankrolling more consumer loans to women and marginalized sectors in the Philippines.
The World Bank Group's private sector arm disclosed on Sunday, June 23, that it invested on June 20 after signing its own account investment in CitySavings on May 28. The IFC board earlier approved the project on March 13, according to the investment information summary.
The 59-year-old CitySavings is the Philippines' fourth biggest thrift bank in asset size, which totaled P153.4 billion as of end-2023, the latest Bangko Sentral ng Pilipinas (BSP) data showed. It is 99.9 percent owned by the Aboitiz Group's Union Bank of the Philippines (UnionBank).
According to IFC documents, the UnionBank subsidiary had wanted to raise as much as $200 million (over P11.7 billion) from a senior, unsecured, fixed-rate, three-year (bullet) or five-year (amortizing, with grace period) gender bond.
Upon Philippine regulators' approval of CitySavings' fundraising, the IFC will cover half of the thrift bank's medium-term financing requirements.
"The project is expected to help CitySavings to grow its salary loan portfolio, majority of whom are female and workers in the lower-middle income segment. This will increase access to financing for these underserved individuals, and consequently increase access to essential products and services such as housing, education, medical, and funds for business," the IFC said.
"At the market level, the IFC anticipates that the project will lead to better integration between the capital markets and thrift and rural banking institutions through innovation, demonstration, and replication channels," it added.
CitySavings currently provides mass-market financial products such as company, government, and teacher salary loans, motorcycle loans, and pension loans, among other traditional deposit products, the IFC noted.
CitySavings currently has 149 branches, of which 11 percent are located in Metro Manila, 52 percent elsewhere in Luzon, 21 percent in the Visayas, and 19 percent in Mindanao. Its money remittance affiliate PETNET, meanwhile, has 3,380 branches and sub-agents.
CitySavings' parent company, UnionBank, is the Philippines' ninth largest bank with P990.2 billion in total assets as of end-2023, based on the latest BSP data.
In a statement last June 13, the IFC quoted CitySavings Chief Executive Officer (CEO) Lorenzo T. Ocampo as saying that "this landmark issuance will help us expand our services to reach underserved and vulnerable segments of society, allowing us to further our mission to elevate the lives of people."
"Investing in women is not only the right thing to do, it also makes good business sense. This landmark issuance will build investor confidence and channel more capital to companies in the Philippines that promote social, economic, and gender equality," Riccardo Puliti, the IFC's regional vice president for Asia and the Pacific, said.