RCBC to issue 250M new shares as part of capital buildup

The Yuchengco-ledRizal Commercial Banking Corp. (RCBC) will issue 250 million new common shares through an additional public offering as part of its strategic capital buildup.

The offering will consist of a primary offer of new shares coming from the bank’s authorized but unissued common shares.

The shares will be offered at a discount to the volume-weighted average price of the shares on the Philippine Stock Exchange within 10 days of a stipulated period.

Over the past two days, the price of the bank’s listed common shares was trading at the range of between P27 to P28 per share.

RCBC officials said the move is still part of the bank’s capital buildup program initiated in 2005.

Other capital buildup efforts are the issuance of $100-million hybrid Tier 1 shares in the last quarter of 2006 and the issuance of P1-billion worth of perpetual, non-cumulative preferred shares.

RCBC also reduced P5 billion of its non-performing assets (NPAs) through the use of a special purpose vehicle as well as private auctions.

"The bank is aggressively increasing its capital to drive the growth of its portfolio and distribution reach consistent with long-term expansion plans. This is within the objective of attaining a capital base that more than comfortably meets the Basel II requirements, which the BSP will implement at the beginning of the thrid quarter of this year," Elbert M. Zosa, RCBC senior vice president, said.

The commercial bank plans to open 15 new branches this year.

Another recent development was the appointment of a new chief executive officer in Lorenzo Tan, former chief executive of the Sun Life Financial group. He was also president of the United Coconut Planters Bank and the Philippine National Bank.

Recently, Spinnaker Capital, a US-based financial institution that specializes in investments in emerging markets globally, acquired a 17.14-percent stake in RCBC from 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) and in turn, merged with Bank of Tokyo- Mitsubishi to become BTMU. BTMU already operates a full branch in the Philippines.