Rizal Commercial Banking Corp., the tenth-largest lender in terms of assets, said Tuesday its board of directors approved the plan to merge with thrift bank subsidiary RCBC Savings Bank to achieve operational cost efficiencies and comply with the standard liquidity ratios.
RCBC said in a disclosure to the stock exchange the planned merger was approved by the board in a meeting on Nov. 26. The merger is subject to regulatory approvals.
The bank said a special stockholders’ meeting would be held on Feb. 26, 2019 to submit and present the plan of merger for their approval.
“The proposed transaction will facilitate for the RCBC Group the following objectives: more efficient capital deployment, more efficient compliance with the Basel 3 liquidity ratios, optimal coordination between the branch banking networks of RCBC and RCBC Savings, medium-term improvement in the funding economics, and operational cost efficiencies,” the bank said.
RCBC Savings Bank, a thrift bank, is 100-percent owned by RCBC. It has a paid-up capital of P3.19 billion and 30,872,163 common shares.
RCBC posted a consolidated net income of P3.2 billion in the first nine months. Excluding non-recurring income (trading gains), core income grew 42 percent from a year ago, on stronger core business led by double-digit growth in net interest income and fee-based income.
The bank’s combined net interest income and fee-based income comprised 91 percent of gross income.
Loan growth remained strong across all segments, expanding 12 percent to P379 billion. All market segments sustained their growth. Average loan volume of the corporate segment grew 9 percent, SME segment 32 percent and consumer segment 33 percent with growth in credit card receivables up 33 percent.
The bank said despite the sustained growth momentum in loans, asset quality remained well-managed with consolidated non-performing loan ratio of 1.22 percent, better than 1.41 percent in the same period last year.
NPL coverage improved to 96.94 percent from previous year’s 77.39 percent at the consolidated level, and a healthier 141.84 percent at the parent bank level.