RCBC to tap debt market to raise funds

Yuchengco-led Rizal Commercial Banking Corp. (RCBC) will return to the local debt market for the third time this year to refinance existing obligations and raise cash for operations.

In a disclosure, the mid-tier lender said it planned to sell up to $400 million in senior IOUs as part of a medium term note program. The bank also plans to issue $275 million in notes to replace existing ones that mature in 2017.

The transactions would be done “subject to favorable market conditions and other considerations,” the bank told the local exchange. The bank did not disclose other details of the transaction.

RCBC completed similar transactions earlier this year amid efforts to manage the company’s debt profile.

In the first half of this year, RCBC’s net profit was up by 25.29 percent year on year to P2.53 billion, driven by the expansion of core businesses.

RCBC’s six-month performance had translated to an annualized return on equity of 9.3 percent and return on assets of 1.1 percent.

Net interest income reached P7.45 billion, accounting for 63 percent of gross income which in turn increased by 12.4 percent year on year to P11.8 billion, the bank reported in July.

In financial intermediation, RCBC achieved an annualized net interest margin of 4.2 percent, remaining one of the highest in the sector.

Core lending business was sustained with loan book—excluding interbank loans—expanding by 18 percent year on year to P275.7 billion in the first semester. All market segments sustained their growth in average loan volumes. The corporate, consumer and small and medium enterprise (SME) segments expanded by 20 percent, 18 percent, and 30 percent, respectively.–Paolo G. Montecillo