The executives of Rizal Commercial Banking Corp. (RCBC) announced on Tuesday that one of Japan’s largest banks will buy a nearly 5% stake in the Yuchengco-led publicly traded lender.
According to John Thomas Deveras, senior executive vice president of RCBC and group head of strategic initiatives and asset management, Sumitomo Mitsui Banking Corp. (SMBC) will sign formal agreements with RCBC to acquire 101,850,000 common shares held in cash.
“The total value of the transaction will be around 4.481 billion pesos and after closing, SMBC will hold a 4.99% stake in the bank,” Deveras said in a virtual briefing.
He added that the agreement cements the strategic alliance of RCBC and SMBC. This will also benefit the expansion of risk assets of the local bank.
“Management believes that with this new capital, we would be able to grow risk assets by an additional 100 billion pesos,” said Deveras.
RCBC President and CEO Eugene Acevedo said the investment will allow the bank to continue financing the diverse needs of its key clients in the business, small and medium-sized business and consumer segments, as well. than to extend the reach of its sustainable finance framework.
“It is a partnership that will help boost the bank’s long-term growth and future prospects and support its digital strategy going forward,” he added.
RCBC’s commitment to its shareholders, according to Acevedo, is to continue to seek major synergies that would allow the institution to strengthen its digital investment plans and continue to invest for the future.
SMBC is a leading Japanese bank and the commercial banking arm of Sumitomo Mitsui Financial Group (SMFG), with total assets of $ 2.21 trillion and a strong equity ratio of 18.61% as of March 2021.
The investment in RCBC is part of SMFG’s overall goal of expanding its operations in Asia, particularly the Philippines.
RCBC and SMBC see important opportunities for synergies and collaboration between the two parties.
The local bank said it aims to expand its consumer banking franchise by leveraging SMBC’s know-how and expertise in serving consumer banking segments not only in Japan but also in other areas. developing countries like Indonesia.
RCBC went on to say that its partnership with SMBC will help it continue to develop creative, inclusive and interoperable digital solutions, which is in line with Bangko Sentral ng Pilipinas’ goal of fostering financial inclusion among people with disabilities. served and unbanked.
The financial institutions plan to collaborate in the business banking segment after the transaction, combining the local knowledge of RCBC in the Philippines with the extensive institutional resources and global network of SMBC.
Cooperation between them will be well placed to take advantage of significant opportunities in business banking, trade finance and foreign exchange, according to RCBC.
RCBC shares rose 5.40 P, or 28.42%, to close at 24.40 P each on Tuesday.