MANILA, Philippines - Yuchengco-controlled Rizal Commercial Banking Corp. (RCBC) plans to raise another $130 million in hybrid Tier 1, Basel III-compliant capital in the third quarter of the year, a top bank executive said.
RCBC executive vice president John Deveres said under the Basel III framework, failure of the notes would work against the investors or acquirers of the notes. Under Basel II, the investors are protected with certain guarantees.
RCBC made a formal signing yesterday with the International Finance Corp. (IFC) wherein RCBC issued 45.15 million common shares amounting to $100 million to IFC Capitalization (Equity) Fund. The Fund is a global equity and subordinated debt fund founded by IFC and the Japan Bank for International Cooperation (JICA).
This development will boost the bank’s total Tier 1 capital adequacy ratio (CAR) to 11.5 percent. It will likewise increase the equity exposure of IFC in the commercial bank to 12.7 percent from 6.7 percent. In March last year, IFC purchased a 6.7-percent stake in RCBC.
RCBC recently sold P4.8 billion worth of non-performing assets (NPAs) to the Philippine Asset Growth One Inc., a special purpose company spearheaded by the IFC, and partnered with OSK Holdings Berhad and Altus Transactional Services Inc.
RCBC president and chief executive officer Lorenzo V. Tan said yesterday the sale of the NPAs, a product of the 1997 Asian crisis, allows the bank to free up more funds for lending.