THE Rizal Commercial Banking Corp. (RCBC) said the recent equity raising has prepared the bank with the more stringent rules that require additional capital buffers under Basel 3.
RCBC President and CEO Lorenzo V. Tan said the recent capital raising bolstered its capital adequacy position.
He said the strategic partnership with the Taiwanese financial company Cathay Life Insurance Co. Ltd. has prepared the bank for Basel 3 compliance.
“We raised our capital last year. This is our second round of capital raising. The Bangko Sentral ng Pilipinas [BSP] will require additional capital buffers: The too-big-to-fail buffers,” he told the BusinessMirror. “So the minimum Tier-1 capital today is 8.5 percent. The too-big-to-fail buffers will require another 1.5 percent to 2.5 percent.”
RCBC inked an agreement with Cathay Life to acquire a 20-percent ownership of the bank. “We’re adequately capitalized up to 2017. This money coming in will keep us in a competitive position up to 2017,” he said.
Cathay Life subscribed to 124.24 million new shares, 119.03 million shares from selling shareholder Hexagon Investments BV and 36.72 million shares from another selling shareholder International Finance Corp. Cathay Life’s total investment amounted to P7.95 billion.
He said having raised the money they need, they no longer worry about overseas events like what’s happening in Russia. “At least, you can sleep well. You already raised the money,” he said.