Taiwan’s Cathay Financial Holding Co. made official its entry into the local banking sector with its acquisition of a significant stake in Rizal Commercial Banking Corp. (RCBC) which, in turn, gets more cash to finance its expansion plans.
In a disclosure, Yuchengco-led RCBC said Cathay’s buy-in strengthened the bank’s books and raised its capital buffer to well-above the minimum prescribed by regulators.
“The proceeds from the investment will continue to support the continued growth of RCBC … and increased expansion into the SME and consumer segments to improve margins,” the bank told the Philippine Stock Exchange.
On Monday, Cathay Life Insurance Corp., a subsidiary of Cathay Financial, finalized its deal to acquire 20 percent of RCBC worth P7.95 billion.
The Taiwanese group bought out old shareholders, and subscribed to new capital.
Cathay’s investment was approved by Taiwanese regulators last week.
RCBC said taking on Cathay as a partner was part of its capital-raising strategy to comply with stiffer regulations that took effect at the start of 2014.
“The transaction is also in line with Cathay’s strategy to expand its business in Southeast Asia,” the local bank said. Paolo G. Montecillo