RCBC selling bad assets worth P4.8B

MANILA, Philippines—Yuchengco-led Rizal Commercial Banking Corp. is unloading P4.8 billion worth of nonperforming loans to a special purpose company partly owned by International Finance Corp.

In a disclosure to the Philippine Stock Exchange, the bank said its board had approved the sale of the bank’s nonperforming assets (NPAs) to Phil. Asset Growth One Inc., a special purpose company formed by the IFC, OSK Group-Malaysia and Altus Transaction Services Inc.

RCBC executive vice president and chief of strategic initiatives John Deveras said the book value of the bad assets being unloaded was P4.8 billion. RCBC has full provision for these bad assets, Deveras said.

RCBC is getting rid of its bad assets in preparation for the more stringent capital adequacy requirements of the Basel 3 framework, which the Bangko Sentral ng Pilipinas will implement by 2014.

RCBC grew its first-half net profit by 35 percent to P3.01 billion year on year. This translated to an annual return on average equity of 15.43 percent.

Capital funds grew by 11.42 percent to P41.22 billion. Capital adequacy ratio to risk assets is 17.11 percent, suggesting more leeway for asset growth from the minimum regulatory requirement of 10 percent. Its tier 1 or core capital ratio stood at 12.73 percent, also exceeding the BSP’s 6 percent requirement.—Doris C. Dumlao