Cathay Life Insurance buys more RCBC shares

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The logo of the RCBC bank is seen at the RCBC building in Manila's financial district on March 11, 2016. — AFP

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 vice-president 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. — Melissa Luz T. Lopez