RCBC shares rise on buyout rumor

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ShareS of Rizal Commercial Banking Corp. (RCBC) rallied 7.25 percent on Monday, recovering from a low in the wake of the money-laundering scandal after reports said giant banks BDO and BPI are keen on acquiring a majority stake in RCBC.

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Last Thursday, RCBC slumped to a 52-week low at P29.65, marginally recovering on Friday to end the week at P30.05.

On April 1 last year, its share prices stood at P45.30.

Victor Immanuel Felix, equity analyst at AB Capital Securities Inc. in a phone interview said that the increase in RCBC’s share price could be attributed to two factors.

“RCBC [stock]shot up because it has been a stock pick for the week after it hit its 52-week low since the money-laundering scandal broke out,” Felix said.

Further, Felix noted that the news report that BDO and BPI are interested in acquiring majority shares of RCBC, which was later denied by the latter, played an integral role in the increase in its share prices.

“The rumor that BDO and BPI are interested in buying majority shares of RCBC was also a big factor why its share prices shot up during the day [Monday],” he said.

Felix said that on Tuesday, RCBC would announce material information the market will focus on, adding that until then the bank’s share price is expected to increase further.

On Monday, RCBC in a disclosure to the Philippine Stock Exchange said it is not in talks or discussion with anyone regarding the sale of a majority stake or any merger.

“Information other that those disclosed by the Bank is purely speculative,” RCBC said in its statement.

Meanwhile, Jun Calaycay, head of research and marketing at A&A Securities Inc., explained that since RCBC has been excessively sold-off since the money laundering scam broke out, it was only expected that its share prices would recover.

“Even before the money-laundering controversy, there had already been rumors that BDO and BPI want to acquire RCBC. It was only just highlighted now. The intention behind it [the supposed acquisition]really was to strengthen the country’s banking sector, which is in line with the Asean market integration,” Calaycay said.

Calaycay also noted that with the exception of RCBC’s current crisis, the bank has been performing very well, as seen in its healthy financial positions.

“Its [RCBC] net profit grew by 15 percent last year, its core lending business has been picking up. Thus, it is not unexpected that other bigger banks would want to acquire it even before the controversy occurred,” Calaycay said.

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2 Comments

  1. Yes. The karma of the yuchengcos are now coming. For those people that are the victims od pacific plan scam and rcbc securities scam and now rcbc money laundering scam.