East West offers up to P5B in Tier 2 notes ‘til June 27

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Friday, June 20, 2014


TO SUPPORT its expansion plans, East West Banking Corp. (EWBC) is issuing up to P5 billion in unsecured subordinated Tier 2 notes due in 2025, the bank announced.

In a luncheon with Cebu investors last Wednesday, officials of the bank and its lead arrangers and selling agents announced that the notes were offered since Monday and will run until June 27, with an initial issue date slated for July 4.

The term runs for 10 years and six months but they have the option to redeem the notes after five years and five months from the issue date.

The debt papers are available for a minimum of P500,000 in increments of P100,000.

Expansion fuel

Rene de Borja, senior vice president and chief finance officer of EWBC, said the bank intends to have 400 branches by the end of 2014. They currently have 380 branches and 535 automated teller machines around the Philippines. It is also investing in e-banking technology to improve its systems and attract more clients. The notes will be used to strengthen the bank’s capital base.

He revealed that their growth strategy involves organic expansion and potential acquisitions. Earlier, bank officials have stated an interest in bidding for the United Coconut Planters Bank.

The Bangko Sentral ng Pilipinas approved the issuance and sale of the notes last May 14 for a period of one year.

Investors are warned that notes are not like deposit accounts and not insured by the Philippine Deposit Insurance Corp.

Track record

The bank has tapped Deutsche Bank AG Manila branch, Hong Kong and Shanghai Banking Corp., Standard Chartered Bank and Unicapital Inc. as the joint lead arrangers and selling agents while Multinational Investment Bancorporation as a selling agent. EWBC will also serve as a limited selling agent.

De Borja pointed out that in just three years, the bank is now ranked 10th among universal banks in the country and is in the top five for credit cards. They are ranked seventh in terms of branch network. They had 123 branches in 2011 and have grown to 380 today.

He added that they have a return on equity of 11.1 percent, which he said is significant considering the capital used to fund their expansion and technology.

EWBC has reported a compounded annual growth of 21.7 percent since 2011, with its loan portfolio growing 35.3 percent at the end of 2013. Consumer loans reached P48.94 billion last year.

The bank’s total assets were at P142.31 billion, up 17.2 percent from the previous year. They expect this performance will assure investors that they are aggressive in growing and diversifying their loan portfolio and expanding their range of financial services and products.

Published in the Sun.Star Cebu newspaper on June 21, 2014.

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