RCBC to merge with thrift bank unit

Yuchengco-led Rizal Commercial Banking Corp. is set to merge with its thrift bank arm RCBC Savings Bank, the country’s third largest thrift bank.

The banking group has some P589 billion in consolidated asset base and combined network of 508 branches and extension offices.

“The proposed transaction will facilitate for the RCBC group the following objectives: (1) more efficient capital deployment, (2) more efficient compliance with the Basel 3 liquidity ratios, (3) optimal coordination of the branch banking networks of RCBC and RCBC Savings, (4) medium-term improvement in the funding economics and (5) operational cost efficiencies,” RCBC said in a disclosure to the Philippine Stock Exchange (PSE) yesterday.

As a stand-alone bank, RCBC Savings has P123 billion worth of resources. RCBC itself is the country’s 10th largest universal bank to date.

In a disclosure to the PSE, RCBC said its board had approved its merger with RCBC Savings Bank, a wholly-owned subsidiary. This is subject to regulatory approvals, specifically from the Bangko Sentral ng Pilipinas and Bureau of Internal Revenue.

The target closing of this merger, based on an optimistic scenario, is by June 30, 2019, said RCBC senior executive vice president John Deveras Jr.

RCBC grew its loan book by 14 percent year-on-year to P372 billion in the first semester. All market segments sustained their growth, with corporate loans rising by 11 percent, small and medium enterprise loans surging by 36 percent and consumer lending growing by 17 percent. Credit card receivables rose by 33 percent.

Capital funds amounted to P68 billion, bringing its capital adequacy ratio to 14.52 percent and core tier 1 ratio to 11.6 percent, well above regulatory requirements. —DORIS DUMLAO-ABADILLA