Cathay Financial of Taiwan to Invest in RCBC of Philippines

To expand operations in Asia, Cathay Financial Holding Co., a major private financial holding company in Taiwan, is reportedly considering spending NT$15-20 billion (US$500-666.67 million) to acquire 20%-30% stake in Rizal Commercial Banking Corp. (RCBC), a mid-sized bank in the Philippines.

Established in 1960 as a development bank and licensed by the Bangko Sentral ng Philipinas (BSP) for both commercial and investment banking, RCBC is the Philippines' fifth-largest bank by asset, with total consolidated assets of about US$9.6 billion as of end-December 2013.

Cathay United Bank and Cathay Life Insurance Co., affiliates of Cathay Financial, will jointly invest in RCBC, for which Cathay United has raised NT$15 billion (US$500 million) by issuing bank debentures in the first half (H1) of 2014 and plans to raise additional NT$30 billion (US$1 billion) in H2.

With annual economic growth of 7%-8% in recent years, the Philippines is regarded as a promising emerging market in Asia. Cathay United has run a representative office in Manila for 17 years and recently applied to upgrade it to a branch to serve potential clients in the country, particularly Taiwanese enterprises there. (JL)