RIZAL COMMERCIAL Banking Corp. (RCBC) expects to absorb the operations of its thrift arm by the second half of 2019, which will provide the lender a bigger retail base while reducing operating costs.
In a plan of merger posted on the local bourse on Tuesday, the Yuchengco-led RCBC said its merger with RCBC Savings Bank (RSB) shall become effective on July 1, 2019, with the former assuming all assets and liabilities of the latter.
After the effective date, “RSB shall cease to exist and its legal personality shall be terminated,” with RCBC as the surviving company.
“Any net income earned by RSB from 1 January 2019 until the Effective Date shall be declared and paid as dividends to RCBC and any net loss incurred by RSB during the same period shall be absorbed and for the account of RCBC,” it said in a statement.
The plan of merger shall be subject to the approval of the Bangko Sentral ng Pilipinas, the Securities and Exchange Commission, the Philippine Deposit Insurance Corp., as well as the Bureau of Internal Revenue.
In September, the universal bank announced it will absorb RSB for “more efficient capital deployment” and “operational cost efficiencies.” In particular, RCBC said consolidating the two entities would mean “more efficient compliance with the Basel 3 liquidity ratios” set by the central bank.
The thrift bank is wholly owned by RCBC, with paid-up capital worth P3.19 billion.
In a separate disclosure, RCBC said it will hold a special stockholders meeting on Feb. 6, 2019 for the approval of the merger and the terms and conditions stipulated in the plan of merger.
The consolidation comes ahead of higher capital and liquidity requirements in line with global standards imposed on big banks which will take effect in January 2019.
RCBC posted a P3.2-billion net profit in the first nine months, down 5.9% from a year earlier. The country’s 10th biggest bank runs 509 branches and 1,593 automated teller machines nationwide as of end-September.
On the other hand, RCBC Savings is the third-biggest thrift lender with at least 154 branches and lending centers.
Shares in RCBC rose 1.77% to P25.70 apiece in Tuesday trading. — Karl Angelo N. Vidal