RCBC plans P4.5-B stock rights offer

MANILA—Rizal Commercial Banking Corp. plans to raise P4.5 billion in fresh equity from the sale of new shares to existing investors as part of the strategy to boost its capital adequacy ratio amid a more stringent regulatory framework.

RCBC’s board of directors approved the rights offer by way of common shares from the unissued portion of its authorized capital stock, to all eligible shareholders of the Bank, the bank said in a disclosure to the Philippine Stock Exchange on Wednesday.

The board also authorized any of the following: John Deveras, RCBC executive vice president for strategic initiatives; Gerald Florentino, first senior vice president and head of corporate planning, or the bank’s management, to act for and on behalf of the bank and to determine the terms and conditions of the offer.

The exercise is still subject to receipt of regulatory approvals, exemptions, confirmations, and consents, as applicable, the disclosure said.

“The proposed rights offer will allow the bank to strengthen its capital ratios under the Basel 3 standards and to support its asset growth,” the disclosure said.

Basel 3 framework, which was implemented in the country at the beginning of this year, introduced a complex package of reforms designed to improve the ability of banks to absorb losses. This also extended the coverage of financial risks and required stronger firewalls against periods of stress.