2 Japanese banks merge, assume Sanwa Bank’s 25% stake in RCBC

In line with the merger of its foreign partner with a fellow Japanese bank, Rizal Commercial Banking Corp. (RCBC) will be taking in a new stockholder, UFJ Bank which is a unit of the foremost comprehensive financial group in Japan.

RCBC corporate information officer Cynthia Santos told the Philippine Stock Exchange that with the merger of Sanwa Bank Ltd. and Tokai Bank Ltd. in Japan, the equity ownership of Sanwa in RCBC equivalent to a 25.06-percent stake will be transferred to UFJ Bank Ltd., the new name of the merged institution.

The merger took effect yesterday following its approval by the Japanese Financial Services Agency last November.

The merged entity, together with Toyo Trust and Banking Co. Ltd. (Toyo Bank) will fall under the umbrella of UFJ Holdings Inc., which is aiming to position itself as Japan’s leading financial services group.

"The merger would optimally utilize the UFJ Group’s resources through speedy reorganization and integration of their overlapping business and functions," Santos said.

With the entry of a stronger partner in UFJ Bank, it is expected that the Yuchengco-controlled RCBC would be able to better position itself in the local banking industry where it is already among the top five biggest players.

Late last year, the bank was able to secure regulatory approval for a pre-emptive rights offer to raise P1.67 billion in fresh capital for its lending activities.

Based on its report, RCBC said the rights offering is represented to be well-timed to increase the bank’s competitive strength and to allow it to pursue strategic opportunities.

A total of 167,035,982 common shares at P10 par value will be involved in the stock rights offer to the bank’s existing stockholders. These shares will be taken from the unsubscribed portion of its authorized capital of P8 billion.

RCBC has an authorized capital stock of 800 million shares divided into 600 million common shares and 200 million preferred shares, both at P10 par value.

At end-September 2001, RCBC had total assets of P156.6 billion, more than half or P86.54 billion is in the form of loans to clients.

Since end-1996, the bank’s net loan portfolio has been growing at an average annual growth rate of about 11.7 percent, and is expected to increase significantly in the future.

However, RCBC said the future growth in its bank loan portfolio and its financial operations will be dependent on a number of factors, including continued domestic economic growth, competition, growth in deposits and availability of funding sources.