, Philippines

Here's why RCBC's non-core asset sales is credit positive

It frees up capital for business growth.

Rizal Commercial Banking Corporation announced that it had concluded share purchase agreements to sell its 25% equity stake in RCBC Realty Corporation and its 49% equity stake in RCBC Land, Inc. for a total of PHP4.55 billion ($103.9 million).

Here's more from Moody's:

These proactive non-core asset sales are credit positive for RCBC because they free up capital for business growth and higher capital requirements under the new Basel III regime.

Based on RCBC’s June 2013 financials, we expect its consolidated Tier 1 capital ratio to increase to 16.8% pro forma for the share sale, from 16.2%, well above the average 15% ratio among our rated Philippine banks at the end of June.

Although the increase in capitalization is not material, it removes the possibility that the bank’s Tier 1 capital may decline because of the punitive deduction that banks must apply to their Tier 1 capital for their equity investments in non-financial entities beginning 1 January 2014.

If the bank does not dispose of its stakes in RRC and RLI by 1 January 2014, its Tier 1 capital ratio will decline to 15.2% under the new capital regime, based on June 2013 financials.

Under the agreements, Pan Malayan Management and Investment Corporation will purchase a 7.66% stake in RRC and the entire 49% stake in RLI; House of Investments, Inc. will purchase a 10% stake in RRC; and RLI will purchase the remaining 7.34% stake in RRC.

These divestments continue the bank’s strategy of monetizing its non-core assets and deploying capital to fund its core lending business.

In February, the bank sold PHP4.8 billion of nonperforming assets to Philippine Asset Growth One, Inc., a special-purpose company. Between March and April, the bank raised $200 million from share placements, which increased its capital buffer.

The disposal of stakes in its associates mirrors recent transactions by Metropolitan Bank & Trust Company.

Ahead of the imminent implementation of Basel III requirements on 1 January 2014, we expect other Philippine banks, particularly those that belong to local conglomerates and those with minority stakes in various entities, to be more active in divesting and monetizing value from their non-core assets.

RCBC is the fifth-largest bank in the Philippines in terms of assets, with market share of 5.2% as measured by loans and 4.3% by deposits.

Pembekuan pendanaan menghantam penyedia layanan BNPL

Investor semakin sedikit mengalirkan dana ke penyedia layanan BNPL yang sudah menghadapi keuntungan margin yang tipis.

HSBC: Aliansi bank-fintech merupakan win-win

Pemberi pinjaman dapat belajar dari teknologi disruptif sambil membantu mereka mematuhi regulasi.

Tokenisasi aset perdagangan untuk menjembatani kesenjangan pembiayaan

Teknologi blockchain dapat mendesentralisasikan operasi keuangan dan mempermudah akses kredit.

BCA menjalankan komitmen terhadap keuangan berkelanjutan

Bank asal Indonesia ini mempertimbangkan aspek lingkungan dan tata kelola dalam keputusan pemberian pinjaman.

Mengapa UNOBank mendorong embedded finance tumbuh di Filipina

Bagi UNOBank, banking interface terpadu adalah strategi pertumbuhan sekaligus upaya inklusi keuangan.

OCBC mencoba mengurangi kesenjangan manfaat bagi agen properti di Singapura

Produk terbarunya menawarkan manfaat finansial di bidang perbankan, asuransi, dan perdagangan.

Upaya Malaysia menjadi anggota BRICS untuk mendorong perombakan sistem perbankan

Namun, tantangan muncul ketika menjauh dari ketergantungan pada AS dan SWIFT.

Platform pembayaran PingPong memperoleh lisensi PJP di Indonesia

PingPong mengincar ekspansi ke pasar ekspor senilai $320 miliar di negara tersebut.

Merger dan penutupan mengancam 3.800 bank di area pedesaan Cina

Sekitar 70 bank di area tersebut telah merger sejak 2023.