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RCBC to inject more capital into thrift, leasing units

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By Karl Angelo N. Vidal, Reporter

RIZAL COMMERCIAL Banking Corp. (RCBC) will put in more capital in two of its subsidiaries to support its growth.

In a roundtable discussion with media late Monday, RCBC Strategic Initiatives head John Thomas G. Deveras, Jr. said the Yuchengco-led lender will inject additional funds into RCBC Savings Bank (RCBC Savings) as well as RCBC Leasing and Finance Corp. (RCBC Leasing) this year.

Mr. Deveras said RCBC will put in P2 billion in additional capital in RCBC Savings and another P800 million in RCBC Leasing.

“I think we’ll put new capital into [RCBC Savings], because our consumer [segment] is growing around 20% per annum,” he added.

In March, RCBC Savings President Rommel S. Latinazo said the thrift lender booked a record-high profit of P1.35 billion last year, 34% more than it logged in 2016.

Mr. Latinazo attributed the growth to the continued expansion of the bank’s core consumer loan portfolio and cost management.

“We’ll probably also need to put more capital into our leasing subsidiary because that book is also growing by about 20% per year,” Mr. Deveras added.

Meanwhile, RCBC President and Chief Executive Officer Gil A. Buenaventura said the bank is on track to hit its profit target for the year, although noting concerns over market volatility.

“We’re on track. We’re above target for the first five months,” Mr. Buenaventura said. “But with all these volatilities outside, we don’t know how will that affect the industry and RCBC in particular.”

Earlier this year, Mr. Buenaventura said he expects RCBC to grow its net profit by five to ten percent in 2018 from the year-ago level amid an increasingly competitive industry landscape.

On Monday, RCBC started offering 535.71 million common shares for its stock rights offer, from which it wants to raise P15 billion to strengthen its capital ratio and fund its business expansion.

“The two biggest shareholders put in their money [on Monday], so it’s already 75% subscribed,” Mr. Deveras said.

Broken down, Yuchengco Group of Companies subscribed to 52% of the total shares, while Taiwan’s Cathay Life Insurance Co. Ltd. placed 23%.

“During our road shows, there was strong interest from existing shareholders both domestic and foreign. Some have hinted they will oversubscribe,” Mr. Deveras added.

RCBC, the tenth-biggest bank in asset terms as of end-2017, booked a net income of P1.1 billion in the first quarter, 13.1% higher than the P1 billion logged in the same period last year, supported by robust loan growth and reduction in non-performing assets.

Shares in RCBC lost 65 centavos or 2.28% to close at P27.85 apiece on Tuesday.