US-based Spinnaker Capital buys out Japanese bank’s stake in RCBC

The Yuchengco-owned Rizal Commercial Banking Corp. (RCBC) has welcomed the entry of its new foreign partner, the US-based Spinnaker Capital Group.

Spinnaker Capital, a financial institution that specializes in investments in emerging markets globally, acquired the 17.14-percent stake in RCBC previously held by Bank of Tokyo-Mitsubishi UFJ Ltd. (BTMU), a unit of Japan’s largest financial company.

The original investment in RCBC shares was made 33 years ago by Sanwa Bank which, as a result of mergers, became United Financial of Japan (UFJ) which, in turn, merged with Bank of Tokyo-Mitsubishi to become BTMU. BTMU already operates a full branch in the Philippines.

"This entry of Spinnaker coincides well with our current drive to raise our capital funds, significantly reduce our non-performing assets, and improve our profitability and balance sheet," RCBC executive vice chairman and chief executive officer Rizalino S. Navarro said in a statement.

Since last year, RCBC has been looking for a strategic equity partner to boost its capital stock and help the commercial bank deal with the new International Accounting Standards (IAS) and the stiff risk-weighting framework under Basel II, which imposes stiffer capital requirements based on a bank’s capability to manage risks.

RCBC officials had made it clear that the bank’s board had indicated willingness to sell up to 49-percent equity for all interested parties both foreign and domestic.

After successfully raising hybrid Tier 1 capital of $100 million, RCBC is offering preferred shares worth P1 billion. It will also increase its authorized capital stock to P13 billion and declare a stock dividend of 15 percent.

Spinnaker has a key global presence in London, Sao Paolo, Brazil, Hong Kong, Singapore, and Tokyo, and invests primarily across all three principal emerging market regions of Asia, Eastern Europe and Latin America.

The group manages a total of $4.1 billion in three emerging markets fixed income funds comprising of Global Opportunity Fund, Global Emerging Market Funds, and the Global Strategic Fund.

Meanwhile, the board of directors of credit card firm Bankard approved yesterday the sale of its assets, including the assumption of some of its liabilities, to RCBC.

RCBC is infusing P1 billion in new capital to coincide with the conversion of loans of RCBC Capital into equity. RCBC Capital is a subsidiary of RCBC and the majority stakeholder of Bankard.

Recently, Bankard increased its authorized capital to P2 billion from P600 million at P1 par value.

Bankard is a joint issuer of MasterCard, Visa and JCB. It was ranked sixth overall among the local insurers, which are mostly commercial banks, with over 300,000 cards in force.