RCBC eyes 2 comm’l banks, foreign partner

The Rizal Commercial Banking Corp. (RCBC) is holding acquisition talks with two commercial banks while scanning the investment horizon for a strategic foreign partner.

Banking sources said one of the two commercial banks is the Philippine Bank of Commerce (PBCom) which has been without a president for nearly six months now.

The other commercial bank is reportedly among the top 10 players but does not have an expanded commercial banking license.

"What RCBC is looking for is a bank that already has size in terms of a nationwide branch network," the source said. "Of course, the price must be right and that the books are relatively clean."

PBCom has nearly 70 branches, half of them located in Metro Manila while RCBC has 287 branches and five extension offices including several remittance offices globally.

In 2003, PBCom experienced liquidity problems and needed nearly P10 billion to get back on track. The bank’s major stockholders infused nearly half the amount while the rest was provided by the Philippine Deposit Insurance Corp. (PDIC) and taipan Lucio Tan.

It then disposed of some P12 billion in non-performing loans (NPLs), making its books relatively clean.

Bank president Isidro Alcantara resigned last September but, instead of naming a new president, the owners formed a special governance committee with executive vice president Angel M. Corpus as officer-in-charge (OIC).

In 2003, RCBC and two banks attempted to acquire PBCom but all withdrew as the bank was then experiencing huge liquidity problems.

In a separate interview, RCBC vice chairman Cesar E.A. Virata confirmed that they had indeed launched exploratory talks with two banks last year. He would not say, however, whether the talks were for merger or acquisition. Virata said RCBC is interested expanding its scope and size not only in the Philippines but also in the region.

One key factor is the outcome of merger talks between the Bank of Tokyo and the United Financial Holdings of Japan (UFJ), with the former reportedly emerging as the surviving entity.

Since UFJ has a 17-percent stake in RCBC, its strategic plans must be molded to that of the Bank of Tokyo. "We have a big Japanese business clientele base which we must consider seriously," Virata said.

The bank vice chairman also admitted that they are looking at other regional players for alliances, including those in the People’s Republic of China, Australia, New Zealand and India.

RCBC is reportedly prepared to open 23 percent for regional players.

Virata said entering into extra-partnership or strategic agreements is another option for domestic and regional expansion.

"We are scanning the environment, looking for strategic partners that will help us introduce new technologies, new products and even new expansion areas or horizons," the former prime minister said.

Locally, RCBC is waiting anxiously for the Bangko Sentral ng Pilipinas (BSP) to lift the branch expansion moratorium. The BSP announced recently that it is seriously considering lifting the moratorium for major commercial banks.

Virata said they have identified at least 20 branch sites and they are poised to apply for licences once the moratorium is lifted.

"We want to grow organically domestically, and through alliances regionally," the RCBC vice chairman added.