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CVC takes stake in Philippine bank

CVC has followed its 2010 investment in Hong Kong’s Sun Hung Kai Financial with another Asian financial deal and its second in the Philippines, acquiring Rizal Commercial Banking Corporation.

CVC Capital Partners has bought a 15 percent stake in the Philippines’ Rizal Commercial Banking Corporation (RCBC) for PHP4.96 billion (€80.8 million; $114.7 million).

“We are very positive on the prospect of the Philippines economy and the growth prospect of its attractive banking sector,” Brian Hong, managing director at CVC, said in a statement. “RCBC's core strategy of providing comprehensive financial services to the growing consumer and SME segments of the Philippines makes this a compelling opportunity for CVC.”

According to the statement, the Philippine lender had been planning to raise capital since the second half of 2010 to expand its loan book, which targets growth in the consumer finance, SME and micro finance segments as well as large corporate clients.

CVC's investment in RCBC follows the International Finance Corporation's own PHP2.1 billion commitment to the bank made in March this year. The statement noted that the fresh capital may also be used for future acquisition of small- to mid-sized Filipino banks.

The transaction marks the firm’s second deal in the Philippines, following its 2000 investment in Steniel Manufacturing Corporation, which manufactures industrial packaging materials for different products. The company is now listed on the Philippine Stock Exchange.

This is not the first time CVC has invested in an Asian financial institution.

Last year, the firm invested HK$2.14 billion (€206.1 million; $275.7 million) in Sun Hung Kai Financial (SHKF), a Hong Kong-headquartered non-banking financial services institution. The deal, which was made through the subscription of mandatory convertible notes and the allotment of warrants, gave CVC up to 19 percent of interest in the company.