RCBC jacks up bond program to P100 billion

MANILA, Philippines — Yuchengco-led Rizal Commercial Banking Corp. (RCBC) has more than tripled its bond and commercial paper program to P100 billion from P30 billion to further strengthen the bank’s regulatory liquidity ratios.

Horacio Cebrero, treasurer at RCBC, told The STAR the bank’s board of directors approved the increase in its peso bond and commercial paper program to P100 billion.

The proposed increase is subject to the approval of the Bangko Sentral ng Pilipinas (BSP).

“This is part of the strategic liquidity management of the bank. This will extend duration of its liabilities and further strengthen regulatory liquidity ratios. It also expands its funding base as it taps other institutional investors,” Cebrero said.

Of the P30 billion approved earlier by RCBC, the bank has raised P23 billion for the first half.

The bank raised P15 billion through the issuance of the first peso-denominated Association of Southeast Asian Nations (ASEAN) green bonds last January and another P8 billion from the maiden ASEAN sustainability bonds issued last June.

Cebrero said the planned fund raising activity would further boost the RCBC’s asset growth.

“And to meet the positive asset growth trajectory of the bank which is line with the robust economic activity as primed by our economic managers in the coming periods,” he said.

RCBC, a member of the Yuchengco Group of Companies (YGC), booked a 14 percent increase in assets to P664.7 billion in end-March this year from P585.7 billion in end-March last year.

Its capital funds stood at P83.3 billion and well above the minimum regulatory requirement with a capital adequacy ratio of 16.14 percent and common equity Tier 1 ratio of 13.34 percent.

On the other hand, its earnings increased by 18.2 percent to P1.3 billion in the first quarter from P1.1 billion in the same quarter last year.

Meanwhile, the BSP has also given RCBC the green light to retire P10 billion worth of debt ahead of schedule to save of interest payments. It is redeeming 5.375 percent Tier 2 capital notes due September 2024.

Banks have been redeeming debt instruments issued a few years ago to avoid paying step-up in interest rate.