Over the course of the next five years, East West Banking Corp. may be expected to raise the bonds it will be issuing, increasing the total by up to P30 billion, for use to refinance its maturing obligations, promote asset expansion, and diversify funding sources.
In a disclosure made to the Philippine Stock Exchange (PSE), the Gotianun-led bank said that its board of directors had authorized the Treasury Group’s proposal to issue up to P30 billion in bonds over a five-year period.
According to EastWest, the proceeds of the offering will be used by the bank, “to support asset growth, diversify funding sources, re-finance maturing liabilities, as well as for other general funding purposes.”
The listed bank would notify the Philippine Stock Exchange (PSE), the Bangko Sentral ng Pilipinas (BSP), and the Securities and Exchange Commission (SEC) after receiving approval from its board of directors.
Most recently, Eastwestbank issued fixed-rate bonds in February 2020 to generate P3.7 billion as part of its P10 billion bond program, which was created in June 2020. In February, the bonds reached maturity.
The bank also made use of the debt market in 2018, issuing long-term negotiable certificates of time deposits with a December 2019 maturity date in order to raise P2.45 billion.
EastWest’s earnings more than quadrupled to P3.3 billion in the first half from P1.52 billion in the same period last year, mostly due to continued growth from its lending portfolio.
The bank’s consumer loan portfolio’s stepping-up initiatives, which were initiated last year, are already yielding results, according to EastWest President Jackie Fernandez.
Although this quarter saw higher loan levels than before the epidemic, Fernandez added, “The work is not yet finished as we still have to focus on optimizing our balance sheet structure to unlock more value.”
As net interest income climbed by 18%, the bank recorded a 29.0% growth in net revenues to P16.3 billion in the first half of this year from P12.7 billion in the same period last year.
As the bank used extra liquidity to fund higher-yielding consumer loans, its loan book increased by 22% to P273.6 billion, but its deposit base stayed the same at P335.1 billion.
The bank’s total assets increased 4.6 percent to P434 billion, and its capital ratios, which measure capital adequacy and common equity tier 1, respectively, continue to be strong at 14.0% and 13.2%.
EastWest is a division of Filinvest Development Corp. (FDC), the family’s flagship business with holdings in sugar, real estate, banking, hotel, and tourism, as well as infrastructure and power production.