Quick Take: RCBC's bad day and 2 more market updates
Rizal Commercial Banking Corp [RCB 22.0 2.6%] [link] had a bad day with the New York Supreme Court (NYSC), which rejected RCB’s appeal to dismiss the Bangladesh Bank’s lawsuit against it and 20 other defendants in connection with the 2016 theft of $81 million from the Bangladesh Bank’s account at the Federal Reserve Bank. The NYSC found that RCB had “intentional participation” (ouch) in the scheme to steal money from the Bank’s account, and directed RCB to enter into mediation with the Bank to resolve the dispute.**
MB Quick Take: This is a civil trial (not a criminal one), so the worst that could happen is for RCB to be on the hook for a hefty financial payout. Still, this is a damaging development to RCB, and to the country’s international banking reputation which has come under increased scrutiny in recent years. RCB still has a few legal options open, like appealing the denial of dismissal, but the court’s commentary on RCB’s involvement isn’t promising.
Robinsons Retail Holdings [RRHI 58.8 1.3%] [link] completed its acquisition of a 4.4% stake in BPI [BPI 112.4 2.2%].
MB Quick Take: Not much to say here, other than it feels like this transaction moved fairly quickly and could be reflective of a shared cooperative goodwill that could benefit both families. I don’t usually mess with banks, so I don’t want to speculate too hard about what it could mean within the industry, but as a potential shareholder, I wouldn’t mind gaining exposure to banking through my company’s investment in a leading operator.
Remittances [link] for November 2022 were up 5.8% y/y to P2.93 billion, and were up 3.4% for the first 11 months of the year to P32.65 billion. Most remittances are still coming from the US, but growth was seen in remittances from OFWs in Saudi Arabia, Singapore, and Qatar. While positive, these growth figures are below the BSP’s estimate of 4% growth for the 11-month period.
MB Quick Take: Remittances fuel huge portions of our economy, and help fill the gaps for low- and middle-income families that are not currently served by the domestic market or existing government programs. Growth is good, but it is worrying for there to be such a large difference between the BSP’s expected growth and the actual growth that was posted. Is the under-performance due to some aspect of the work abroad that we will need to incorporate into consumption models going forward, or was it due to some fault in the BSP’s own projection model that could have knock-ons throughout the forecasting system that we should address? I’m not an expert here either, so I’m curious to hear from anyone with experience in the remittances space on theories about the difference and what it means going forward!
**Editor's Note: RCBC's representatives sought to clarify this, as follows: "Contrary to what is written in the column, the New York court did not rule on the participation of any party, intentional or not, in the alleged theft. Neither is the Decision a ruling on the merits of the case nor, in any way, a finding of liability on the part of RCBC or any of the individual defendants. The decision merely said that the court has jurisdiction over the case."
Merkado Barkada's opinions are provided for informational purposes only, and should not be considered a recommendation to buy or sell any particular stock. These daily articles are not updated with new information, so each investor must do his or her own due diligence before trading, as the facts and figures in each particular article may have changed.
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