, 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.

Bagaimana perkembangan perubahan fokus manajemen kekayaan bank?

Seorang analis mengatakan, "Ada hingga $25 miliar dalam biaya yang bisa didapat di Asia, tetapi ini pasar yang sulit.

Aplikasi blu oleh Group BCA memperluas ekosistem digital melalui BaaS

Strategi tersebut telah berhasil meningkatkan transaksi dan membangun kepercayaan nasabah sebesar 53,4% sepanjang 2023.

Christine Ip dari UOB merenungkan karir perbankan tiga dekadenya dan kembali ke dunia seni

Dia percaya bahwa keuangan dan kreativitas saling berkaitan dalam membangun kolaborasi talenta yang holistik di UOB.

Shally Koh dari Citi berbicara tentang bagaimana mendorong perbankan yang lebih beragam

Bank tersebut memperkenalkan program keterlibatan pria dan dukungan ibu sebagai bagian dari upayanya untuk kesetaraan gender.

Maisie Chong dari StanChart berbicara tentang tidak pernah menolak peluang dan melangkah maju

Chong berbagi tentang menemukan kepuasan dan pemenuhan diri melalui perjalanan kerja.

Mayda Lim dari OCBC dalam membangun pipeline talenta di bidang teknologi dan perbankan

Lim menggabungkan kebutuhan untuk mendukung bankir perempuan dengan kekurangan talenta dalam industri tersebut.

Aturan baru batasan harga mendorong lebih banyak penggabungan P2P di Indonesia

Regulasi ini akan meningkatkan biaya kepatuhan, namun batasan harga akan membuat sulit untuk mengimbanginya.

Deputi Gubernur: Pembiayaan Islam di Indonesia akan berkembang sebesar 10% -12% pada 2024

Ekonomi dan keuangan syariah Indonesia mempertahankan pertumbuhan positif pada 2023.

Bagaimana HomePay memerangi penipuan renovasi di Singapura

Uang ditempatkan dalam rekening escrow dan disalurkan saat pencapaian tahap-tahap tertentu.