RIZAL COMMERCIAL Banking Corp. (RCBC) has received a P4.48-billion capital infusion from Sumitomo Mitsui Banking Corp. (SMBC), which will be used to support the local lender’s digital banking push.
SMBC now has a 5% stake in RCBC as a result of its investment, the local lender said on Tuesday. The capital infusion will be used by the RCBC to boost its digitalization drive and its sustainable finance framework.
Credit Suisse acted as the sole financial advisor to RCBC for the transaction, while Clifford Chance and Romulo Mabanta Buenaventura Sayoc & de los Angeles provided legal advice.
The deal also diversifies the bank’s ownership, RCBC said. Taiwan’s Cathay Financial Holding Co. and the World Bank’s International Finance Corp. (IFC) already have minority stakes in RCBC.
“Post-closing, the Yuchengco Group [of Companies] will own 50% of the bank. Cathay will own 22%, the IFC will have 3% and SMBC will own 5%,” said John Thomas G. Deveras, RCBC senior executive vice-president and head of asset management.
SMBC’s investment is likewise expected to bring opportunities for RCBC in the fields of consumer and corporate banking, as well as its digitalization.
“Our digitalization plan is more than just applying for a digital bank [license] which we will be doing,” RCBC President and Chief Executive Officer Eugene S. Acevedo said in an online briefing on Tuesday.
“We have plans for applying for a new license — a digital banking license. Meantime, we are incubating and growing at least one, probably two, businesses that we can potentially spin off in the future as a separate or an independent digital bank,” Mr. Acevedo said.
RCBC launched a mobile app called Diskartech last year where users can create a bank account and make transactions such as deposits and apply for loans without needing to go to a branch.
Mr. Acevedo added that RCBC wants to further expand its digital presence as clients have become more comfortable doing online transactions.
“You probably have noticed that we have closed 70 of our branches last year. It’s not because we want to simply close [these branches]. It is not just because COVID-19 (coronavirus disease 2019) forced us to do so, but what really happened was that customer behavior forced us to follow them,” he said.
Another area RCBC is looking to tap through their partnership with SMBC is boosting its data science team as the Japanese bank has expertise in the area, RCBC’s top official noted.
“Data analytics has been practiced in use in almost all facets of our banking businesses, from credit scoring, to customer acquisition to cross selling,” Mr. Acevedo said.
RCBC’s net income decreased by 31.55% to P1.58 billion in the first quarter from P2.308 billion a year ago amid trading losses and lower foreign exchange gains.
The Yuchengco-led lender’s shares ended at P24.40 apiece on Tuesday, up by P5.40 or 28.42% from its previous close. — L.W.T. Noble