Key lender Security Bank Corp. has obtained approval from the Bangko Sentral ng Pilipinas (BSP) to raise as much as P20 billion from an offering of high-yield deposits.
These long-term negotiable certificates of time deposits (LTNCTDs) will be offered in multiple tranches, the bank said in a disclosure to the Philippine Stock Exchange on Tuesday.
The bank’s offering comes at a time when the BSP is injecting fresh liquidity into the financial system through a
reduction in the reserve requirement and overnight borrowing rate.
LTNCTDs are issued by banks. They usually have higher yields compared to regular time deposits or savings accounts.
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Unlike regular time deposits, LTNCTDs cannot be preterminated by holders. However, investors can negotiate or transfer their holdings in the secondary market prior to maturity. Interest on LTNCTDs is tax-free for individual investors if the instrument is in the name of the individual holder and is held for at least five years.
Security Bank expects to end this year with a net profit nearing the all-time high level of more than P10 billion seen
in 2017.
