RCBC to sell stake in RCBC Plaza owner in preparation for Basel 3

RCBC Plaza Building. FILE PHOTO

MANILA, Philippines — Yuchengco-led Rizal Commercial Banking Corp. is unloading its stake in the property company that owns the RCBC Plaza along Ayala Avenue as part of preparations for stringent capital adequacy requirements under Basel 3.

In a disclosure to the Philippine Stock Exchange on Tuesday, RCBC said its board had approved the sale of the bank’s 34.8 percent stake in RCBC Realty to a consortium comprising of the Pan Malayan Management and Investment Corp. and House of Investments for at least P4.31 billion to as much as P5.48 billion.

This means that the Yuchengco group will spin off the interest in the property firm to other holding companies to allow RCBC to focus on core banking businesses.  By selling its entire interest in RCBC Realty, the bank not only generates proceeds from the sale but also reduces the risk weights from property holdings especially as capital adequacy ratio requirements tighten.

RCBC head of strategic initiatives John Deveras confirmed that this transaction was part of the bank’s preparation to meet Basel 3 requirements, which the Bangko Sentral ng Pilipinas plans to implement effective January 2014.

According to Deveras, RCBC is selling “all that it owns” in RCBC Realty, which in turn is the Yuchengco-owned real estate company that owns RCBC Plaza.

RCBC Plaza was the first office developed in the Makati central business district to be granted an IT-zone status by the Philippine Economic Zone Authority, an attached agency of the Department of Trade and Industry. It has been declared a special economic zone.