RCBC aims for dominant position in consumer, retail banking sector

Rizal Commercial Banking Corp. (RCBC), the banking-arm of former Ambassador Alfonso Yuchengco, is moving closer to occupying a dominant position in the highly competitive consumer and retail banking markets with the recent acquisition of Bankard Inc. for P1.7 billion, a bank official requesting anonymity told The STAR yesterday.

The bank, he said has been trying to expand into the consumer and retail markets starting with its acquisition of Capitol Development Bank in 1998 which was merged with its thrift bank subsidiary, RCBC Savings Bank. As a result, the bank's branch network expanded from only 6 to 118.

With Bankard, he said RCBC will now have 400,000 cardholders instead of only 55,000. Bankard has over 300,000 cardholders.

"With this acquisition, RCBC will immediately achieve its target critical mass of cardholders necessary to make its credit card business truly profitable. With Bankard's share of 12 percent of the domestic credit card market, RCBC moves closer to being one of the major players in the industry," the official said.

Right now, RCBC has three existing credit cards, the RCBC Mastercard, RCBC Card, and the RCBC-JCB. The official refused to say what its current market share is.

On the other hand, Bankard, the credit card subsidiary of PCI Bank before it was merged with Equitable Bank has Bankard MFI, a local credit card and electronic cash card; Bankard One, the first smart card in the industry and the international Visa and Mastercard. It was organized in 1981.

Equitable PCI Bank sold its 67-percent stake in Bankard to RCBC recently for P1.7 billion. The purchase price (of P7.8 per share) was fixed at 1.925 times its book value of P4.10 per share.

After selling Bankard, Equitable will focus its attention on its own Equitable Card Network which carries both Visa and Mastercard and JCB.

An Equitable Bank official, who asked not to be named, said they plan to expand into the high C segment of the market composed of ordinary office workers, factory supervisors, and entrepreneurs. At present, he said it is focused on the AB bracket.

"We are hoping to do better with the rest of the industry this year," he said. "We will definitely maintain our market share. Right now, we are a dominant player in the credit card industry.