RCBC Savings Bank will be merged with parent Rizal Commercial Banking Corp., the tenth-largest lender in terms of assets, in a bid to achieve medium-term improvement in funding economics and operational cost efficiencies.
RCBC said in a disclosure to the stock exchange Tuesday its board of directors approved the planned merger in an earlier meeting Monday. The consolidation is subject to the regulatory approval of the Bangko Sentral ng Pilipinas, Securities and Exchange Commission, and Bureau of Internal Revenue.
RCBC Savings Bank, a thrift bank, is 100-percent owned by RCBC.
“The proposed transaction will facilitate for the RCBC Group the following objectives: 1. more efficient capital deployment, 2. more efficient compliance with the Basel 3 liquidity ratios, 3. optimal coordination between the branch banking networks of RCBC and RCBC Savings, 4. medium-term improvement in the funding economics and 5. operational cost efficiencies,” RCBC said.
RCBC said the timetable for implementation and related regulatory requirements would be announced later.
Bank officials earlier said the parent bank was planning to infuse around P2 billion in RCBC Savings Bank, as its consumer segment was growing around 20 percent yearly.
The bank’s board of directors also approved the infusion of an additional P800-million capitalization in subsidiary RCBC Leasing & Finance Corp. to support expansion.
RCBC Leasing & Finance Corp. provides financial leasing services. It offers direct lease, sale and leaseback.
RCBC posted an unaudited consolidated net income of P2.2 billion in the first half, down 6 percent from P2.35 billion a year ago, on lower trading gains.
Net interest income grew 12 percent to P9.7 billion. The bank said even with the intense pricing competition, it achieved an annualized net interest margin of 3.98 percent which remained one of the highest in the sector.
This was bolstered by the bank’s vibrant lending business with net loans and receivables expanding by 14 percent to P372 billion. All market segments sustained their solid growth with 11-percent increase in corporate loans, 36-percent rise in SME Loans, 17-percent improvement in consumer loans and 33-percent expansion in credit card receivables.
Rizal MicroBank, the microfinance arm of the bank that provides financing requirements to micro and small enterprises, increased its outstanding loan portfolio by 27 percent.
RCBC Bankard had a strong and active card base of 625,000 in the first half of 2018, up by 16 percent from the same period last year.