International Finance Corporation (IFC), the private-sector investment arm of the World Bank Group, recently purchased a USD 48.4 million equity stake in Rizal Commercial Banking Corporation (RCBC), a private commercial bank that was established in the Philippines in 1960, with the intention of enabling RCBC to increase lending to microfinance clients and small and medium-sized enterprises (SMEs).
With the increased funding, RCBC also intends to expand into areas beyond Manila in an effort to provide microcredit for low-cost housing. IFC Resident Representative Jesse Ang commented that the “investment helps open up new business areas for RCBC while helping the poor. It also contributes to strengthening the local banking sector by providing long-term support and raising the comfort level of international investors in committing capital to the Philippines.”
In 2010, RCBC reported total assets of PHP 320 billion (USD 7.4 billion), return on assets (ROA) of 1.47 percent, return on equity (ROE) of 14.07 percent and net income of PHP 4.25 billion (USD 97.7 million) [1].
By John Howard-Smith, Research Associate
About International Finance Corporation (IFC): A member of the World Bank Group, the International Finance Corporation (IFC) offers loans, equity investments, advisory services and technical assistance to private companies with the intent of alleviating poverty and promoting open and competitive markets in developing countries. As of 2011, IFC has 182 member countries that drive its policies and approve disbursements. In fiscal year 2009, IFC’s new investments totaled USD 14.5 billion.
About Rizal Commercial Banking Corporation (RCBC): Rizal Commercial Banking Corporation (RCBC) was established in 1960 as Rizal Development Bank. In 1962, it was approved by the Philippines central bank to operate as a commercial bank and, in 1963, it began operations under its current name. With its subsidiary, RCBC Savings Bank, RCBC has approximately 340 branches in the Philippines. It also offers global remittance services through approximately 160 branches in Asia, the Middle East, the United States, Canada and Europe. In 2010, RCBC reported total assets of PHP 320 billion (USD 7.4 billion), return on assets (ROA) of 1.47 percent, return on equity (ROE) of 14.07 percent and net income of PHP 4.25 billion (USD 97.7 million).
[1] IFC Press Release: “IFC Boosts Philippine Bank’s Capital to Support Lending to Small Enterprises”, http://www.ifc.org/ifcext/media.nsf/content/SelectedPressRelease?OpenDocument&UNID=52DA69EA7FB1782B8525784E0057438B
MicroCapital.org story, February 11, 2011: “MICROCAPITAL BRIEF: Rizal Commercial Banking Corporation (RCBC) of Philippines Raising Capital for Microfinance Acquisitions”, https://www.microcapital.org/microcapital-brief-rizal-commercial-banking-corporation-rcbc-of-philippines-raising-capital-for-microfinance-acquisitions/
MicroCapital.org story, July 2, 2009: “MICROCAPITAL BRIEF: Rizal Commercial Banking Corporation (RCBC) of the Philippines to Expand Microfinance Operations”, https://www.microcapital.org/microcapital-story-rizal-commercial-banking-corporation-rcbc-of-the-philippines-to-expand-microfinance-operations/
MicroCapital’s Microfinance Universe profile: International Finance Corporation (IFC), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=International+Finance+Corporation+(IFC)
MicroCapital’s Microfinance Universe Profile: Rizal Commercial Banking Corporation (RCBC), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Rizal+Commercial+Banking+Corporation+%28RCBC%29
Browse the MicroCapital Universe and add your entry to the wiki at https://www.microcapital.org/microfinanceuniverse/
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