RCBC eyes P3 billion in return to onshore debt market

MANILA, Philippines — Rizal Commercial Banking Corp. (RCBC) is raising at least P3 billion as it returns to the onshore debt market via the issuance of conventional or sustainability bonds.

In a disclosure to the Philippine Stock Exchange, the bank said the proceeds of the fund-raising activity would be used to support asset growth, refinance maturing liabilities and supplement other general funding purposes.

“The terms and timing of the proposed bonds transaction will be determined subject to the bank’s requirements and prevailing market conditions,” RCBC said.

This is the fourth time RCBC is issuing green or sustainability bonds as part of its P100-billion bond and commercial paper program launched in July 2019.

The last time RCBC tapped the domestic debt market was in March 2021 when the bank raised P17.87 billion via the issuance of 2.5-and 5.2-year fixed-rate ASEAN sustainability peso bonds.

Prior to the latest issuance, the Yuchengco-led bank raised P23 billion via the issuance of green and sustainability bonds over the past three years, including P15 billion in February and P8 billion in June, both in 2019.

The country’s eighth largest lender in terms of assets also raised P7.5 billion in November 2019 as well as P7.05 billion in March and P16.6 billion in July 2020 via the issuance of bonds in the domestic debt market.

RCBC’s net income soared by 33.3 percent to P5.34 billion in the first nine months last year after a strong third quarter as business momentum continued to accelerate amid the gradual reopening of the economy with the steady decline in COVID cases.

RCBC’s total assets increased by 19 percent to P872.97 billion. Its capital booked a 10.1 percent growth to P109.59 billion, translating to a capital adequacy ratio of 15.2 percent and a common equity tier-1 ratio of 12.1 percent.

Last July, Tokyo-based Sumitomo Mitsui Banking Corp. (SMBC) completed the acquisition of a close to a five percent stake in RCBC for a total consideration of P4.48 billion as part of its efforts to expand franchise and strengthen digital banking in Asia.

Bangko Sentral ng PIlipinas Governor Benjamin Diokno expects Philippine banks to issue more green, social and sustainability bonds to help raise funds to bankroll environment-friendly projects.

Banks in the country have issued $1.15 billion in foreign currency denominated and P85.4 billion in local currency denominated green, social and sustainability bonds since 2017.

As of end-September, Diokno said Philippine banks have issued $701 million worth of green bonds, $300 million worth of sustainability bonds, and $150 million worth of social bonds in the offshore debt market.

Likewise, Diokno said local banks have also raised P48.9 billion via the issuance of sustainability bonds, P21.5 billion from social bonds, and P15 billion from green bonds in the onshore debt market.

Amid the COVID-19 pandemic, the BSP chief said two banks have issued social bonds worth approximately P29 billion to finance the needs of eligible micro, small and medium enterprises (MSMEs).