Rizal Commercial Banking Corp., the fifth-largest private bank in the country in terms of assets, said Monday it completed the sale of an additional 15-percent stake amounting to P27 billion to Sumitomo Mitsui Banking Corp., a subsidiary of Sumitomo Mitsui Financial Group and one of the largest banks in the world.
RCBC said in a disclosure to the stock exchange the P27-billion capital infusion would reinforce its growth trajectory, particularly in core businesses in corporate, small and medium enterprises and retail segments.
“Through this partnership, RCBC will once again set the bar higher, adopting global best practices and customer-centric strategies, promoting disruptive banking solutions, and expediting our digital transformation,” RCBC president and chief executive Eugene Acevedo said in a statement.
The bank said in November 2022 the transaction would increase SMBC’s shareholdings in RCBC from 4.999 percent of the total outstanding common stock of the local bank to 20 percent.
SMBC’s strategic investment would bring in P27.126 billion ($460.78 million) of new core equity tier 1 capital to RCBC. It is part of the local bank’s capital-raising plan to support long-term sustainable asset growth and investments in technology and cyber security and human resources.
SMBC is one of the largest banks in Japan and is the commercial banking arm of Sumitomo Mitsui Financial Group with 269.7 trillion yen in total assets and consolidated total capital ratio of 16.02 percent as of June 30, 2022.
The investment in RCBC is in line with SMFG’s strategy to expand in select key Asian markets, including the Philippines, Indonesia, Vietnam and India.
RCBC has a P1.17-trillion balance sheet and a loan portfolio of P588 billion as of June 30, 2023. As the first local bank to put up a Japan desk back in 1974, RCBC’s dealings with Japanese companies are some of the most extensive among its peers.
It said the closer collaboration would open more business matching opportunities for local customer base and SMBC’s global network.
RCBC reported a net income of P12.1 billion in 2022, up by 71 percent from 2021 on double-digit increases across its core businesses.
It sustained the growth in first quarter of 2023, when profit climbed 70 percent year-on-year to P3.6 billion. Annualized return on equity improved to 13.3 percent, while annualized return on assets reached 1.3 percent.
Total resources expanded 20 percent year-on-year to P1.2 trillion, with the steady buildup of earning assets—customer loans went up by 10 percent and investment securities rose by 27 percent.
Accounting for 18 percent of asset growth for the period, the bank’s loan portfolio focused on higher yielding segments such as loans to small and medium enterprises which went up by 18 percent. Consumer loans increased 14 percent and credit card receivables grew 46 percent.