China Banking Corp., owned by mall tycoon Henry Sy, said it would re launch within the third quarter as a new savings, Manila Banking Corp., it recently bought as savings bank to cater to the mass market.

As approved by the Bangko Sentral ng Pilipinas (BSP) and the Securities and Exchange Commission (SEC), it will be renamed as China Bank Savings, Inc., (CBS).

China Bank’s new wholly-owned subsidiary bank has an outstanding equity of P1.062 billion as of June 30, 2008.

"We see the savings bank as a means to strengthen our operations and to attract more of the mass market," Samuel L. Chiong, senior vice president of China Bank and concurrent president of CBS said.

"We are very excited about China Bank Savings as it underscores our strategy to diversify China Bank’s business to gain a bigger market share and our commitment to serve a wider client base," he added.

China Bank acquired Manila Bank, with 75 branches (27 of which were operational at the time of acquisition), in June 2007.

From December 2007 to February 2008, the Bank converted and integrated 20 of Manila Bank’s branches into the China Bank branch network, and closed and consolidated 6 branches with existing China Bank branches.

China Bank will use the remaining branch licenses to expand the networks of both the main bank and the savings bank in the next three years.

Meanwhile, China Bank’s maiden issue of the fixed rate long-term negotiable certificates of deposit (LTNCDs) had an overwhelming response.

From an initial amount of P3 billion, the floatation was upsized to the BSP-approved amount of P5 billion, China Bank said in a disclosure to the Phil. Stocks Exchange.

The offer period was from July 28 to August 8, 2008; however, with the tremendous response, the issue was already oversubscribed by July 29.

"The success of our maiden issue is very encouraging. We did not foresee that the issue will be oversubscribed by day 2, prompting us to offer P2B billion more," said Antonio S. Espedido, Jr., China Bank senior vice president and head of Treasury.

China Bank was authorized in June by the BSP to issue a total of P5 billion LTNCDs.

The bank will be using the funds raised from the issue to expand its asset base.

The issue bears an indicative rate of 8.25 percent per annum, payable at the end of each three-month period.

"The indicative coupon of 8.25 percent for our LTNCD is attractive especially to individual investors," said Espedido.

Individual investors get the interest coupon tax-free if they hold the LTNCDs to maturity compared to the BSP Special Deposit Account and government securities, which are subject to the 20 percent withholding tax.

LTNCDs cater to individuals and corporations seeking to diversify their portfolio with an investment alternative that offers potentially higher returns than regular peso time deposits and government securities.

The Philippine Deposit Insurance Corporation also covers the LTNCDs.

China Bank tapped Deutsche Bank AG, Manila Branch, and ING Bank N.V., Manila Branch to be the Joint Lead Arrangers and Selling Agents.

China Bank and Multinational Investment Bancorporation (MIB) are additional Selling Agents, while Deutsche Bank is also the Registrar and Paying Agent for the issue. (Jimmy Calapati)