A significant shift is underway at Rizal Commercial Banking Corp., with plans to tap the bond market for a purpose beyond simple growth. The bank intends to issue peso-denominated bonds, specifically earmarked to fuel sustainable initiatives and projects.
This move builds upon a substantial increase in the bank’s bonding capacity. In 2022, RCBC doubled its bond program to P200 billion, a clear signal of its ambition and future funding needs.
The funds raised won’t be solely dedicated to “green” projects. While sustainability is a key focus, proceeds will also support overall asset growth, refinance existing debts, and provide general funding flexibility.
RCBC retains considerable control over how and when these bonds are issued. The bank will determine the specifics – amount, duration, interest rates – based on market conditions and internal approvals, allowing for strategic timing.
Investor appetite for RCBC’s sustainable offerings is already demonstrably strong. Last year’s offering of ASEAN Sustainability Bonds exceeded expectations, raising P12.21 billion against a minimum target of P3 billion.
Those bonds, with a 2.5-year term and a 6% annual coupon, represented the eighth drawdown from the P200-billion program, bringing total issuances to P99.01 billion. This highlights a consistent and successful strategy.
This isn’t RCBC’s first foray into international sustainable finance either. Earlier in 2023, the bank secured $350 million through a five-year sustainability bond offering, further solidifying its commitment.
The bank’s financial performance is bolstering these initiatives. RCBC reported a substantial increase in net income – a 60% jump in the third quarter of 2023, bringing year-to-date profits to P8.18 billion, a 32% increase year-over-year.
This robust financial health provides a solid foundation for continued investment in both traditional banking operations and forward-thinking sustainable projects, positioning RCBC for long-term growth and responsible financial practices.
