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9 March 2011
Rizal Commercial Banking Corporation ("RCBC") and the International Finance Corporation ("IFC") have reached an agreement today whereby IFC will acquire an approximately 7.2% stake in RCBC common shares, as measured on a post-funding basis, for total consideration of over Php 2.1 billion (approximately US$49 million).
The investment of IFC into RCBC represents an important element of the capital raising strategy of RCBC. It is also in line with IFC's financial markets strategy in the Philippines which focuses primarily on providing comprehensive capital and institutional building support to its partners, as well as supporting increasing access to finance to SMEs, microfinance and climate change initiatives.
The additional capital raised will continue to support the strong growth in the bank's loan book, which in addition to large corporate targets growth in the SME, microfinance and consumer finance segments. The incremental capital raised may also be used to support the future acquisition of small and/or medium-sized banks in the Philippines.
Pro forma for the acquisition of shares by the IFC, RCBC's 12/31/2010 Consolidated Capital Adequacy Ratio ("CAR") would increase from 17.77% to 18.51% and RCBC’s Tier 1 CAR would increase from 12.63% to 13.41%.
Citi acted as RCBC's sole financial advisor on this transaction.
RCBC is among the top five largest private domestic commercial banks in the Philippines today. RCBC invests in various financial subsidiaries to ensure that it can provide the services needed by its diverse and constantly growing market which includes large corporations, small and medium enterprises, high net worth individuals, the growing middle income consumer market, OFWs, and the C market. RCBC is a key player in investment banking, trust services, wealth management, foreign exchange, remittance and payment services (with both foreign and domestic locations), credit card, microfinance/SME lending, electronic banking and cash management and retail depository services, etc. RCBC celebrated its 50th golden anniversary last year.
The IFC is the member of the World Bank Group that promotes the growth of the private sector in less developed member countries. Its principal activity is helping finance individual private enterprise projects that contribute to the economic development of the country or region where the project is located. It is considered as the World Bank Group's investment bank for developing countries. The IFC lends directly to private companies and makes equity investments in them, without guarantees from governments, and attracts other sources of funds for private-sector projects. It is the largest multilateral source of loan and equity financing for private sector projects in the developing world.