Makati—(PHStocks)—Rizal Commercial Banking Corporation (RCBC, PSE: RCB) has consummated the sale of its 65.425%% stake in Bankard Inc. (PSE: BKD) for a total consideration equivalent to a 72.7% share of the Net Cash in the Balance Sheet of Bankard, plus a 65.425% share in the corporate vehicle premium totaling PhP250 million after trading hours last 27 December 2013 to RYM Business Management Corporation (RYM) and other investors.
The transaction will allow RCBC to release approximately PhP731 million of Common Equity Tier 1 (CET1) capital, representing its share in the Net Book Value (NBV) of Bankard + Net Gain. This capital release could translate into an incremental increase in the bank’s loan books by PhP7.3 billion, deriving incremental annual net interest earnings, assuming a 4% spread, of PhP292 million. The sale of the Bankard listed legal vehicle was part of RCBC’s capital raising/capital release program so as to comply with the new Basel 3 capital guidelines effected 1 January 2014. The transaction allowed RCBC to meet and exceed the minimum Core Equity Tier (CET1) ratio of 8.5% and the minimum Total Capital Adequacy Ratio (CAR) of 10%.