RCBC in talks with new investor on P4.4-B deal

Talks are ongoing between Rizal Commercial Banking Corp., one of the country’s 10 largest banks, and an investor who is placing P4.4 billion in the Yuchengco-led bank. The negotiations will likely be over, the transaction closed in the next few weeks, RCBC president, and CEO Lorenzo Tan said Wednesday without naming the investor. The deal comes on the heels of another transaction with the International Finance Corp., which infused P2.1 billion into the bank. The private investment arm of the World Bank, IFC leans toward banks that serve the underbanked or the unbanked sectors of the population. The latest deal RCBC is trying to close is part of the bank’s over overall drive to strengthen its tier-one capital, or shareholder equity, by P6.5 billion. The new investor will account for a 13.5-percent stake in the bank, said Joni Deveras, head of RCBC Strategic Initiatives. This will eventually give IFC a 6.5-percent in RCBC. On Wednesday, IFC and RCBC signed a purchase deal involving 73 million bank shares worth P2.1 billion and valued at $48.4 million. Once complete, transaction arranged by Citibank buys IFC a board seat in RCBC. Tan said RCBC’s “fund raising drive" will help "fund our growth, prepare us for Basel III and give us the capital to acquire [other banks] if there are any acquisitions." RCBC plans to open 15 new branches this year. IFC resident representative Jesse Ang said they invested in RCBC because of the bank's growing exposure in microfinance and the small and medium enterprise sector of the business. "The bank is moving in the area of the underserved, which is microfinance. The fact that RCBC is focused in this like-mindedness is why we are partnering with them," Ang said. IFC is investing $200 million to $300 million a year on top of its $1-billion exposure in the Philippines, Ang said. — VS, GMA News