RCBC to raise P1B from planned sale of preferred shares

Yuchengco-controlled Rizal Commercial Banking Corp. (RCBC) plans to raise P1 billion through a preferred share issuance this month to beef up its capital, according to a top company official.

RCBC vice-chairman Cesar Virata said the share issue has already been approved by the Bangko Sentral ng Pilipinas and the Securities and Exchange Commission.

The offered shares are non-diluting but convertible into common shares.

With this capital-raising activity, the bank’s capital adequacy ratio would stand at between 19 percent to 19.5 percent.

Virata said the bank is set so sell P3 billion worth of non-performing loans this month. Its NPLs, or bad loans, currently stand at about P8.7 billion.

RCBC is eyeing a net profit of P1.8 billion this year, 20 percent higher than last year’s P1.5 billion, mainly due to trading gains.

Virata also revealed that the Bank of Tokyo is considering selling its 17-percent stake in RCBC to allow it to solely focus on its own branch here.

RCBC is the country’s fifth largest private domestic commercial bank with total consolidated assets of about P 185 billion as of end-2005.

It opened as a small development bank in 1960, then went through rapid expansion to become the preferred bank of a wide range of markets: the Filipino-Chinese market, the corporate market, locators in the export processing zones, the middle market, and the consumer/retail market.

RCBC’s long-term objectives are to maintain and further enhance its position as one of the leading universal banks in the country, to achieve an optimal increase in the bank’s capital, and to increase shareholder value.

As a member of the Yuchengo Group of Companies, RCBC forms part of a financial services conglomerate with strong market competitiveness in insurance and other risk management services.

RCBC’s long years of partnership with one of Japan’s and the world’s biggest financial conglomerates provided it with the experience and expertise to strengthen competitiveness among Japanese clients and foreign locators in the country’s export zones.