Sumitomo buying 30% stake in RCBC leasing unit

The Sumitomo Group has signed up to acquire a 30-percent equity stake in the leasing arm of Rizal Commercial Banking Corp. (RCBC) via third-party share issuance.

In a statement on Wednesday, RCBC said Sumitomo Mitsui Finance and Leasing Co. Ltd. (SMFL) entered into an agreement to acquire part of RCBC Leasing and Finance Corp. (RLFC). This is intended to help expand the Japanese firm’s presence in the Philippines.

“This new partnership brings together SMFL’s knowledge and expertise from its global presence with RLFC’s operations and RCBC’s local network to more effectively capitalize on the various opportunities arising from the Philippines’ strong economy,” RCBC said.

SMFL, a joint affiliate of the Sumitomo Mitsui Financial Group and Sumitomo Corp., provides leasing and financing services across the globe, including high-growth areas like India, Indonesia and Vietnam.

SMFL’s services include asset and equipment leasing as well as aircraft and ship finance.

On the other hand, the 68-year-old RLFC offers financial leasing services across five cities in the Philippines.

RCBC noted that SMFL and RLFC have yet to reach final transaction agreements. These will likewise be subject to the approval of regulators.

This comes two years after Sumitomo Banking Corp., a wholly owned subsidiary of SMFG, increased its ownership stake in RCBC to 20 percent from 4.99 percent previously.

This brought in P27.13 billion in new capital to RCBC. It enabled the Yuchengco-led bank to increase its investments in technology, cybersecurity and human resources.

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Last year, RCBC said they wanted to sustain loan growth through their collaboration with the Sumitomo Group. The latter is particularly interested in consumer loans.

RCBC netted P5.3 billion in the first six months of this year. That represented a 20-percent surge, which was attributed to robust loan demand.

Credit cards and personal loan volumes jumped by 47 percent, auto loans by 46 percent and housing loans by 24 percent.

RCBC’s digital transaction volumes likewise grew by 28 percent due to its expanding user base.