The Henry Sy-led China Banking Corp. (China Bank) has secured an approval from the Bangko Sentral ng Pilipinas (BSP) to allow it to increase its interest in Manulife China Bank Life Assurance Corp (MCBL) to 40 percent from the current 5 percent.
In a statement, China Bank said it received the BSP approval in a letter dated September 26, and hopes that would pave the way for MCBL to use China Bank branches to sell its Manulife life insurance products.
Besides increasing its stake in MCBL, China Bank also said that it would inject an additional P1.58 billion into its subsidiary China Bank Savings Inc. “to be used for the pretermination or early redemption” of the P1.7 billion Tier 2 debt notes of Planters Development Bank.
China Bank said it decided to redeem the notes early because “the said notes no longer qualify as Tier 2 Capital under the Basel III guidelines.”
Basel III is a comprehensive set of reform measures, developed by the Basel Committee on Banking Supervision, to strengthen the regulation, supervision and risk management of the banking sector.
The P1.7 billion notes were issued in two tranches: One with an interest rate of 10.25 percent per annum due 2019, and the other has 8.75 percent annual interest due 2020.
As of end-2013, China Bank has 367 branches and 561 automated teller machines nationwide. It offers various services such as mobile and Internet banking (China Bank Online) and phone banking services (China Bank TellerPhone).
According to its 2013 annual report, China Bank is an affiliate of the SM Group. The Sy family holds 20 percent interest in China Bank.