IFC acquires 6.7% stake in RCBC

MANILA, Philippines - The International Finance Corp. (IFC) has acquired a 6.7 percent stake in Rizal Commercial Banking Corp. (RCBC) worth an estimated P2 billion.

The acquisition will entitle IFC, the private sector investment arms of the World Bank, a seat in the bank’s board. In a disclosure to the Philippine Stock Exchange, RCBC reported that it received approval from the Bangko Sentral ng Pilipinas (BSP) to sell 73.4 million of its common shares to IFC.

“Common shares consisting of 50.4 million treasury common shares and 23 million unissued common shares (from 1.1 billion authorized common shares) subject to the terms and conditions approved by the BSP,” the universal bank of the Yuchengco Group of Companies said.

It marks the third time the investment arm of the World Bank has made an acquisition into a Philippine bank.

Last year, IFC invested $150 million in Banco de Oro Unibank Inc. (BDO) through the IFC Capitalization Fund and the IFC. The IFC invested $22.5 million and the IFC Capitalization Fund agreed to invest $127.5 million.

The investment arm also has investments in Planters Development Bank, a domestic thrift bank specializing in the small and medium enterprise (SME) sector.

IFC Philippine resident representative Jesse Ang said they are still interested in making equity investments in lower tier commercial banks, thrift and rural banks.

The only condition that the World Bank subsidiary is looking for is that the focus of the bank will be to lending to SMEs.

“We would like banks or other institutions with access to a large base,” Ang added.

The IFC is also investing in banks on a limited scale such as issuing grants and making guarantees to loans to banks that are into green financing.

Green financing are loans extended to firms that are making efforts to reduce carbon emission in the work place, or renewable energy projects.