Bankard, a unit of Rizal Commercial Banking Corp., the country’s ninth largest commercial bank in assets, has approved the sale of a total of 262 million unissued common shares at P1 per value.
RCBC Capital Corp. has been appointed as issue manager of the rights offer.
The record date for the stock rights issue will be determined after Bankard secures approval for the offering from the Securities and Exchange Commission.
Borne out of the merging acquisition between RCBC Capital Corp. and Equitable-PCI Bank in May 2000, Bankard Inc. has transformed itself into a major player in the credit card industry. Bankard, Inc. carries the widest range of card products in the Philippines, as it has been integrated with RCBC’s Credit Card Division.
The company now offers a wider and more innovative range of products and services: Bankard, the largest domestic credit card; Bankard MF1, a domestic card combining the functionalities of Bankard and Bankard E-Cash; Bankard MasterCard and Bankard Visa, international cards accepted worldwide; Bankard One, the world’s first smart card with flexible installment options; and Bankard E-Cash, the first reloadable electronic purse in the country.
Bankard has even extended through its ancillary service, the Bankard Travel Services, which offers services from ticketing, passporting, and other travel concerns. Clients can even enjoy a zero surcharge deal when they use their Bankard credit card for these transactions.
However, Bankard incurred a loss of P574 million last year as against a net income of P83 million in 2003.
The loss was blamed for the tighter accounting practices, adopted in compliance with a central bank circular, which reduced the company’s interest income and increased its provisions for problem accounts.
Bankard said it was also adversely affected by increased interest rates and the re-imposition of the gross receipts tax in 2004 in place of the value-added tax.
However, Bankard remains optimistic it will perform better this year as it continues to expand its merchant base and fee-based business and reduce its allowance for doubtful accounts as a result of lower delinquencies/higher portfolio quality and cutting funding costs.