Vehicle traffic moves outside the RCBC Plaza on Ayala Avenue in Makati City. The bank is eyeing to buy other banks. -- Rhoy Cobilla

RCBC plans to buy other banks

By Czeriza Valencia

THE Rizal Commercial Banking Corp. (RCBC) is eyeing the acquisition of several small banks as well as a large thrift bank to grow its distribution network and cover some five million customers within the next five years, bank president and chief executive officer Lorenzo Tan said late Monday.

In a press briefing following the bank’s annual stockholders’ meeting late Monday, Tan said the present market conditions are good for the acquisition of new banks.

Tan said the bank, led by industrialist Alfonso T. Yuchengco, prefers to acquire small banks which can be acquired on book value, instead of midsized banks whose book value is “twice as much.”

“We would like to acquire small banks because you get them on book value,” Tan said.

Tan explained that small banks are cheaper at prevailing market conditions after the current turmoil in financial markets has dampened banks’ profits from treasury gains, thus lowering their book value, or a bank’s total net asset base.

“It is better to buy at these conditions at expected lower prices,” he said.   

RCBC currently has a customer base of one million, which it plans to expand to five million in the next five years through the acquisition of small banks.

This year, the bank is also adding 150 branches to its 603-branch network.

Tan said the bank is drawing income from fees and low-cost deposits.

He said RCBC is expected to complete the takeover of a large thrift bank within the next three months.   

RCBC posted a net income of P773 million in the first quarter of 2008, down P55 million, or 6.62 percent, from P828 million a year earlier.

In 2007 it recorded a 6.5-percent growth in net income to P3.21 billion from P2.05 billion in 2006, surpassing its P2.5-billion target. Its gains came largely from asset disposals, income from investments and dividends, commissions and fees and other income sources.

RCBC is currently the country’s fourth-largest bank in terms of capital base with consolidated resources of P239 billion as of end-December 2007, up by 6.67 percent from P224 billion in the same period in 2006.

RCBC plans to buy other banks

THE Rizal Commercial Banking Corp. (RCBC) is eyeing the acquisition of several small banks as well as a large thrift bank to grow its distribution network and cover some five million customers within the next five years, bank president and chief executive officer Lorenzo Tan said late Monday.

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