Cathay Life In­sur­ance buys more RCBC shares

Business World - - BANKING & FINANCE - Melissa Luz T. Lopez

TAI­WAN-BASED Cathay Life In­sur­ance Co. Ltd. raised its stake in Rizal Com­mer­cial Banking Corp. (RCBC) this month as it bought new shares worth P416.397 mil­lion, the bank an­nounced yes­ter­day.

In a dis­clo­sure to the Philip­pine Stock Ex­change, the Yuchengco- owned lender said that Cathay Life’s stake is now at 23.35% from 22.71% last year.

This came af­ter the Tai­wanese firm bought ad­di­tional shares in the bank on Sept. 6 worth P390.647 bil­lion and on Sept. 7 worth P25.75 mil­lion. Th­ese ac­qui­si­tions were priced at P51.25 and P51.50 per share, re­spec­tively.

Fol­low­ing the trans­ac­tion, Cathay Life now holds 326.929 mil­lion shares in RCBC.

Cathay Life, a sub­sidiary of Cathay Fi­nan­cial Hold­ings Co., bought into RCBC with an ini­tial 20% stake in 2015 priced at P17.92 bil­lion (ap­prox­i­mately $402 mil­lion) as it pur­chased shares at P64 apiece, well above the P46 trad­ing price at that time.

In De­cem­ber that year, Cathay Fi­nan­cial said the com­pany’s board had al­ready ap­proved the op­tion to raise its stake in RCBC up to 30%.

RCBC pre­vi­ously said that the fresh cap­i­tal in­fu­sion will count to­ward its high- qual­ity cap­i­tal, which rose to 14.17% from 11.83% pre­vi­ously fol­low­ing the deal. This is well above the 6% min­i­mum ra­tio pre­scribed by the cen­tral bank.

The in­vest­ment pro­ceeds will also sup­port the grant of fresh loans par­tic­u­larly to the con­sumer and small busi­ness seg­ments.

Cathay Life ac­quired 5.8 mil­lion ad­di­tional shares in RCBC in March 2016, even af­ter the listed lender found it­self in the mid­dle of the $81-mil­lion cy­ber heist which saw stolen funds from the Bangladesh cen­tral bank trans­ferred to fake ac­counts held un­der the bank’s branch along Jupiter Street in Makati City.

Arnold Kan, ex­ec­u­tive vi­cepres­i­dent at Cathay United Bank (CUB), said the Tai­wan-based fi­nan­cial firm con­tin­ues to sup­port RCBC as part of their “strate­gic” and “long- term” in­vest­ment strat­egy.

CUB is a Tai­wan-based lender op­er­at­ing in Manila, which has scaled up from a rep­re­sen­ta­tive of­fice into a li­censed com­mer­cial bank since Oc­to­ber 2015. •

CATHAY LIFE In­sur­ance Co. Ltd. bought more Rizal Com­mer­cial Banking Corp. shares, rais­ing its stake in the lo­cal lender.

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