RCBC eyes foreign strategic partners

The Yuchengco-controlled Rizal Commercial Banking Corp. (RCBC), the seventh largest Philippine bank in terms of assets, is in talks with unnamed foreign financial institutions over a possible capital injection for the bank.

RCBC is seeking to improve its capital base "via a long-term strategic alliance with another institution that will not only infuse capital but also enhance business development and the technological expertise of the bank," it told the Philippine Stock Exchange in a disclosure letter yesterday.

The bank earlier said it plans to raise its capital by between 22 percent to 36.7 percent to P14.1 billion either by selling more shares to the public or through an injection of fresh funds from either existing or new investors.

Japan’s UFJ Bank Holdings, which hold a 17 percent equity in RCBC, earlier said it will sell its entire stake in the bank due to its merger with Bank of Tokyo-Mitsubishi, the surviving entity in the merger. Bank of Tokyo-Mitsubishi already has a banking presence in the Philippines.

RCBC also indicated plans earlier to acquire as many as five thrift banks and merge them into its operations to stay competitive.

"We are looking out for thrift banks in the top 10 of their industry," bank president Francisco Magsajo Jr. said.

The central bank is encouraging mergers among the nation’s 42 commercial lenders and 86 thrift banks to strengthen an industry hounded by unpaid loans. The central bank has blocked banks from adding branches since 1999 as it seeks to encourage mergers.

Thrift banks have lower capital requirements than commercial lenders, allowing them to offer higher interest rates to small depositors. – AFP