By FIL C. SIONIL
Rizal Commercial Banking Corporation (RCBC), owned and controlled by Ambassador Alfonso Yuchengco, has sold for still undisclosed amount its credit card subsidiary, Bankard Inc. to GE Consumer Finance (GECF).
The acquisition by GECF, the financial arm of US-based General Electric Co., through its local subsidiary here, GE Money Savings Bank is an indication of its strong commitment to the Philippines.
GE Money Savings President and Chief Executive Officer Ben Kua has said his institution was aiming to make a dent in consumer banking, one of which is the credit card business, which is one of its strong points.
RCBC has informed the Philippine Stock Exchange (PSE) of this development but sorely missed out on the amount or the total worth of the transaction.
Industry sources believed there could be "certain discounts considering that the credit card firm has been on the red."
"But, definitely not for a song, too," sources said.
For the first three months of the year, Bankard registered a net loss of P247 million from P422.2 million net loss posted for the full of 2005, with total capital expenditures amounting to P11.1 million .
The financial woe of Bankard started in 2004. While it earned some P86 million in 2003, the credit card firm posted its biggest net loss of P577.4 million in 2004.
According to RCBC management, the bank has "accepted the GECF proposal to acquire substantially all of Bankard’s assets and to assume certain liabilities related to its credit card-issuing and cards-present merchant acquiring businesses," the bank management told the PSE, a requirement for any listed firm.
RCBC Executive Vice Chair and Chief Executive Officer Rizalino Navarro issued a statement, saying that the deal is part and parcel of bigger plans to transform Bankard into a more attractive vehicle for groundbreaking and exciting businesses that will result in a more profitable entity going forward."
The transaction with still undisclosed amount will be finalized next month after it has been approved by the Bankard shareholders in its annual stockholders meet scheduled this coming July 28.
Bankard is a 72-percent owned and controlled by RCBC Capital Corp., which in turn is a wholly owned subsidiary of RCBC.
It is a joint issuer of MasterCard, VISA and JCB. It was ranked sixth overall among the local insurers which are mostly commercial banks.
As of end December 2005, Bankard has issued a total of 321,000 credit cards.
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