Monday, May 21, 2018
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RCBC raises $150 M to improve capital adequacy

MANILA, Philippines–Rizal Commercial Banking Corp. has completed a $150-million equity deal meant to boost capital adequacy ahead of the implementation of the Basel 3 framework.

The $150 million worth of RCBC shares were sold at a price per share of P64 in an overnight deal that was 3.2 times oversubscribed, RCBC head of strategic initiatives John Deveras said on Thursday morning.

The deal was priced at a 4.5 percent discount to RCBC’s closing price of P67 per share on Wednesday.


Of the total issue, $100 million consisted of primary shares while $50 million were secondary shares, Deveras said.

This follow-on equity deal is part of the bank’s $430-million capital-raising strategy to prepare for stringent capital adequacy requirements under the Basel 3 framework, which introduces a complex package of reforms designed to improve the ability of banks to absorb losses, extend the coverage of financial risks and have stronger firewalls against periods of stress.

The equity deal was arranged by Credit Suisse, Deutsche Bank, Macquarie Capital and Maybank ATR Kim Eng Financial Corp.

RCBC earlier signed a fresh $100-million equity infusion deal with International Finance Corp. and likewise unveiled plans to issue $130 million worth of Basel 3-compliant hybrid notes by the third quarter.

The bank grew its net profit last year by 24 percent to P6.21 billion on higher interest and fee-based income, and hefty treasury gains. This translated to a return on equity of 15.52 percent and a return on assets of 1.77 percent.

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