Rizal Commercial Banking Corporation
|Type||Public (PSE: RCB)|
|Industry||Finance and Insurance|
|Founded||Manila, Philippines (1960)|
|Key people||Ara Dizon, Honorary Chairman
Helen Y. Dee, Chairwoman
Lorenzo V. Tan, President and CEO
|Net income||P3.21 billion PHP (56%) (2007) |
The Rizal Commercial Banking Corporation (RCBC, PSE: RCB) was established in 1960 as a development bank and is licensed by the Bangko Sentral ng Pilipinas (BSP) for both commercial and investment banking. It is the Philippines' fifth-largest bank by assets, with total consolidated assets of about P185 billion (or US$3.6 billion) as of end-December 2005.
RCBC opened for business as a small development bank in 1960, then went through rapid expansion to become the preferred banker to a wide range of markets: the Filipino-Chinese market, the corporate market, locators in the export processing zones, the middle market, and the consumer/ retail market.
In 1964, RCBC marked a significant presence in the Filipino-Chinese business community with the opening of its first branch in Binondo. In 1967, this foothold was strengthened when Ambassador Alfonso T. Yuchengco, founder of the Yuchengco Group of Companies (YGC), assumed the Chairmanship of the board. Because of his strong ties with the Filipino-Chinese business community and the Bank's excellent record in serving this market, the Filipino-Chinese market has remained to be one of the Bank's major market niches.
In 1973, Chairman Yuchengco deemed it crucial to invite two international banks to raise the level of banking expertise of RCBC in trade financing, international banking, credit control, and systems and procedure to global standards. These were the Continental Illinois National Bank and Trust Co. of Chicago, USA (CONNILL) and The United Financial of Japan. The tie-up with these banks reinforced the role of RCBC among corporate clients who preferred institutions with international banking expertise. Further, the affiliation with The United Financial of Japan opened another market for RCBC: the Japanese market. Together, the corporate, the Filipino-Chinese and Japanese markets account for a substantial share of the Bank's portfolio.
The period marked the rapid branch expansion for the Bank. While most of its peers were establishing branches within Metro Manila, RCBC pursued branch expansion in key growth areas like the export processing zones. This enabled the bank to tap and forge long-term relationships with the foreign locators especially those in the semiconductor industry.
Anticipating bigger things to come, RCBC successfully listed its shares in the Philippine Stock Exchange in 1986. The following year, RCBC diversified into the retail market with the introduction of private banking, home mortgage, car financing and the RCBC Credit Card.
The establishment of the RCBC's thrift bank arm - the RCBC Savings Bank in 1996 was an indication of RCBC's strategic thrust of becoming a major player in the retail market. This has been supported by the acquisition of a large thrift bank - the Capitol Development Bank in 1998 and the acquisition of 67% stake in Bankard, a major player in the credit card business in mid-2000.
The expanded branch network of 287 branches and 5 extension offices, the opening of foreign offices in Hong Kong (RCBC International Finance, Ltd.) in 1979, in the US (RCBC California International, Ltd.) in 1993 and in Italy (RCBC Telemoney Europe) in 1995 and affiliations with offshore banks and money transfer agencies, stabilized the position of RCBC in the remittance business. The Bank now accounts for more than 10% of the remittance business.
On top of a highly rewarding banking business, the bank has equity holdings in companies engaged in power generation, automotive assembly, thrift banking, food manufacturing, etc. These companies are deemed leaders in their respective niches and are in industries with long-term growth potentials. RCBC entered into a joint venture agreement with Honda Cars and Mitsubishi Corp. of Japan and the Ayala Group to produce the well-engineered and popular Honda cars for the Philippine market. Together with another Yuchengco Group flagship, the House of Investments, and the Enron Corp., it put up the Subic Power Corp. (SPC), a diesel-fired 116-megawatt power plant built under the Build-Operate-Transfer scheme.
To strengthen its position in the capital market, the bank fully acquired the Philippine Pacific Capital Corp. from its partners and renamed it RCBC Capital Corp. It entered into a joint venture agreement with Isuzu Corp., Mitsubishi Corp. and the Ayala Corp. to form Isuzu Motors Phils. Co., Ltd., which is into the assembly, manufacturing, importation and distribution of AUVs, pick-ups and medium- and big-sized trucks and buses. It has equity participation in Pilipinas Shell Petroleum Corp. In November 1996, RCBC joined Agila Holdings, Itochu and Hacienda Luisita in putting up the Luisita Industrial Park Corp., a 300-hectare industrial park for Japanese investors. Together with Great Pacific Life Assurance Corp., it forged a tie-up (1997) with Japan's largest life insurance company, the Nippon Life Insurance Corp., forming a new joint venture life insurance company - the Nippon Life Insurance Company of the Philippines. Other equity investments of RCBC are in LGU Guarantee Corp, a joint BAP/DBP guarantee institution to cover 85% of local government's unit debts; in Lima Land, Inc., a real estate company involved in the development of a 440 hectare industrial park in Lipa/ Malvar; in KG Investments Holdings, Ltd. with the Koo family and in RCBC Land, Inc., a joint venture between RCBC and Pan Malayan Management and Investments Corporation. The company's maiden project is the RCBC Plaza, the new home of RCBC. The project is a joint venture with the Government (of Singapore) Investment Corporation.
RCBC's long-term objectives are to maintain and further enhance its position as one of the leading universal banks in the Philippines, to be a dynamic financial institution that will be the preferred choice of selected target markets, to achieve an optimal increase in the Bank's capital, and to increase shareholder value. To achieve these, the Bank defined the key strategic areas in which efforts and initiatives will be focused on in the highly challenging borderless banking landscape of the new millennium.
First is through leadership in identified markets: economic/ export zones, consumer lending, the middle loan market, treasury services, asset and cash management services for corporate and retail markets and the overseas remittance business. These are growth areas where the bank has core competencies and areas that would complement its core markets, network and affiliations.
Second is through continued synergy with members of YGC and by drawing experience from years of affiliation with the United Financial of Japan. As a member of the YGC group, RCBC forms part of a financial services conglomerate with strong market competitiveness in insurance and other risk management services. Through this alliance, the bank is able to broaden its network and delivery channels inasmuch as the more than 40 companies forming the YGC group present a huge base of existing and potential clients for consumer banking and finance, treasury, trust and investment services. By synchronizing the group's products and services and its marketing and delivery, RCBC will be able to deepen its products and services and provide greater value-added to all its clients. Likewise, RCBC's long years of partnership with one of Japan's and the world's biggest financial conglomerates provided it with the experience and expertise to strengthen competitiveness among Japanese clients and foreign locators in the country's export zones.
Third is through continuing realignment of the Bank's business divisions. By clearly delineating the markets served in each business division, the Bank is able to allocate resources appropriately, strengthen its relationships with key clients and focus business divisions on key areas that will drive revenue growth, enhance distribution capabilities and allow the Bank to offer a broader range of products and services to its target markets.
Fourth, the Bank shall focus on strategies to improve cost efficiency and achieve service excellence. Wherever possible, back office functions and other support processes are moved out of business centers and centralized in processing centers such that business centers become strong competitive sales outlets with seamless support from the back office and information technology systems. To support these initiatives and to provide a platform for the delivery of new products and services, investments in information technology will continue to be a key strategy.
Fifth, the Bank will continue to pursue enterprise-wide risk management initiatives to ensure the Bank's continued strength and viability in the face of multifarious risks that are present in the various core businesses of banking. It will continue to adopt sound corporate governance practices and structure to promote the continued good health of the Bank for the benefit of all stakeholders.
In 2012, air cargo delivery service giant LBC Express recently strengthened its ties with the Rizal Commercial Banking Corporation (RCBC) in making money remittance services much more accessible. Under the signed memorandum of agreement, the LBC Send & Swipe Card will be made more readily available through LBC’s more than 1,000 branches nationwide. LBC has also entered into an agreement with RCBC to have RCBC ATM’s installed soon in selected LBC branches.
Lehman Brothers' exposure
On September 17, 2008, RCBC Executive Vice President Elbert Zosa revealed its exposure to Lehman Brothers Holdings Inc. (LEH), and set aside provisions of P 980 million ($ 20.8 million). It stated "the provision will have no adverse effect on its capital base, which stood at P 27.4 billion, or a capital adequacy ratio of 20.97%." RCBC's exposure with Lehman was $ 40 million. BSP data revealed RCBC set aside a buffer[disambiguation needed] equivalent to 52% percent of its exposure.
On Friday, May 16, 2008, at 9:00 am, ten people (including a security guard and a depositor) at a RCBC branch in Laguna were killed during a bank robbery. Nine of the victims died on the scene and one died later at a hospital. The victims were apparently lined up and shot in the head. The shooter(s) may have used a silencer, since no residents in the area had heard any gunshots.
Initial reports claimed that two security guards who were supposed to be on their shift were missing, leading authorities to suspect they were involved in the crime as part of an inside job. The bank's vice president, Edwin Ermita, told the Associated Press that the thieves tried to hide the body of a security guard under a tarpaulin in the rear of the bank. Two bank employees' bodies were found in the open vault. The thieves used an employee's vehicle to escape. Up to P 20 million may have been taken in the heist. Five suspects had been identified. Bank employee Isagani Pastor, the lone survivor in the incident that killed 8 RCBC employees and a depositor, died on May 18. Meanwhile, the Commission on Human Rights investigated the Task Force RCBC shootout in Pagaspas, Tanauan, Batangas which killed 4 men, since police investigators were still determining whether they were connected to the Cabuyao, Laguna robbery, and at least 2 law enforcers had been linked to the bloody robbery-massacre. Further, multiple murder, frustrated murder and illegal possession of firearms cases were filed on May 23, with the Calamba Prosecutors Office against SPO1 Florencio Fiesta, employer of and owner of gun used by Bernabe Fiesta.
The Philippine National Police on May 30, 2008, also filed with the Biñan, Laguna Regional Trial Court, non-bailable charges of robbery and multiple murder against the 6 accused, after the prosecutor Frisco Marfil's inquest: Richard Gomolon, a former Army soldier police; RCBC security guard Joel Dela Cruz; Jesus Narvaez (all currently held by Task Force RCBC); Danilo Letoquit, who arranged the procurement of the getaway vehicle; Allan Bago, and an unidentified male who served as the lookout (all at large). 5 other suspects are being pursued and 2 suspects are also sought for their alleged involvement in other armed robberies in the region. The bank stated that the armed suspects robbed $ 206,890. The Philippine National Police (PNP) on June 11, 2008 filed with the Provincial Prosecutor's Office in Laguna, multiple homicide cases against 6 more respondents: Pepito Magsino, Montano Tolentino, Eugenio Hilario, Jake Javier, Jun Alvarez and Crisanto Alvarez (heist's self-confessed lookout).
On November 20, 2008, RCBC massacre suspect, Jake Javier, single, 23, of Tanauan, Batangas, was turned over by the Commission on Human Rights (Philippines) Chairman Leila de Lima to Camp Crame's Philippine National Police Chief Jesus Verzosa, due to request for protection. The Biñan, Laguna Regional Trial Court Branch 24 issued the arrest warrant, and Javier announced filing a motion for transfer to the Custodial Center in Camp Crame.
- Rizal Commercial Banking Corporation website
- Reuters, Stock Quote
- Reuters, Analyst Research, Rizal Commercial Banking Corp (Philippine Stock Exchange)
- Reuters Full Description
- money.cnn.com, Rizal Bank Sets PHP980 Million Provision For Lehman Exposure
- business.inquirer.net, RCBC reveals Lehman exposure
- reuters.com, Philippines' BDO says exposure to Lehman at $134 mln
- business.inquirer, 7 Philippine banks have $386M in exposure to Lehman
- News.yahoo.com - Philippines bank robbery
- USA Today.com - 9 killed during Philippine bank robbery
- GMA NEWS.TV, QTV: RCBC: Up to P20M seized in heist, 21 May 2008
- GMA NEWS.TV, 5 robbers identified in RCBC massacre, 21 May 2008
- Abs-Cbn Interactive, 10th victim in deadly RCBC heist dies
- Abs-Cbn Interactive, CHR probes cop shootout with RCBC rob suspects
- GMA NEWS.TV, Cops tag 2 ‘uniformed men’ in RCBC rob-massacre
- QTV, QTV: 3 complaints filed vs suspect in Calamba massacre, 23 May 2008
- Abs-Cbn Interactive, Suspects in deadly RCBC heist charged
- ap.google.com, 5 charged in bloody Philippine robbery[dead link]
- newsinfo.inquirer.net, Charges filed vs 6 suspects in Cabuyao massacre
- abs-cbnnews.com, Six more charged for RCBC robbery-massacre
- RCBC massacre suspect in Camp Crame custody
- CHR chief 'rescues' RCBC massacre suspect