Japan’s Sumitomo Mitsui Boosts Stake In Philippines’ RCBC With $460 Million Investment

Sumitomo Mitsui Banking Corp. has agreed to invest a further 27.1 billion pesos ($460.8 million) in Philippine lender Rizal Commercial Banking Corp. (RCBC) as the Japanese banking giant expands its footprint across Asia.

With the additional investment, Sumitomo Mitsui’s stake in RCBC will increase to 20% from 5%, subject to regulatory approvals, RCBC said in a statement on Thursday. Under the deal, Japan’s second-largest lender will buy 382 million RCBC shares at 71 pesos each, more than three times as much as Wednesday’s closing price.

“SMBC and RCBC have deepened their mutual understanding since partnering in 2021 and have come to agree on the high growth potential of RCBC,” Sumitomo Mitsui said in a separate statement, adding the two banks plan to explore new business opportunities. RCBC shares jumped as much as 27% in early morning Philippine trading.

RCBC has steadily recovered since the Covid-19 pandemic wreaked havoc on the global economy. Bolstered by robust growth in corporate and consumer lending, the bank’s net profit jumped 88% to 10 billion pesos in the first nine months of this year, surpassing the 7-billion-peso profit achieved in the whole of 2021. Sumitomo Mitsui first bought a 5% stake in the Philippine lender in June last year.

The Philippine bank is controlled by the family of the late tycoon Alfonso Yuchengco, whose eldest daughter Helen Dee serves as chairwoman. Dee is also the president of the Yuchengco Group of Companies, one of the Philippines’ oldest conglomerates with interests in construction, education, insurance, pharmaceuticals and real estate.