RCBC shares feel heat

When shareholders of Rizal Commercial Banking Corp (RCBC) dumped their shares after the bank’s Jupiter branch was implicated in the $81-million cyberheist that hit the Bangladesh central bank, the result was disastrous for the bank’s share prices. From a year high of P47.70 per share, the bank’s share prices plummeted to P28.75. 

That kind of volatility is very difficult to comprehend for the investing public and this is usually what happens when a listed issue comes under scrutiny from the investing public for reported malfeasances or imagined wrongs. It is a good thing that the top two shareholders of the bank moved to acquire shares from the open market to stop the stock price’s slide.

Thus, the reported purchase by RCBC shareholders Pan Malayan Management and Investment Corp. and Cathay Life Insurance Co. Ltd of Taiwan of RCBC shares at P30 a pop, halted that slide that stock market pundits said could have happened due to the cyberheist that put RCBC at the center of a complex money-laundering issue that has engulfed the nation.

It is a very strong narrative, this money-laundering issue that is considered the biggest of its kind in the world and this is what has dragged down the bank’s share prices. As they say in stock-market parlance, a crisis of confidence that hits a listed issue results in a drop in the share prices as investors race to sell down their shares.

Imagine the ingredients of this unfolding story that has the hallmarks of a book blockbuster. The victim is the Central Bank of Bangladesh, considered one of the poorest countries in the world. The money transfers were for accounts that were opened a year before by supposed bank depositors who now turn out to be fictitious. And the money trail goes to the casinos where the trail vanished, together with the part of the $81 million.

No wonder the bank’s share price declined to P28.75, a far cry from its highest share price of P47.70 . This price volatility is anathema to stock-market investors for the difference is so wide that nobody wants to get squeezed at the far end of the low price point.

Meanwhile, the compelling narrative goes on and there have been so many twists and turns in it that many investors stay glued listening to the Senate hearings.

For instance, the accusation of Jupiter Branch Manager Maya Santos Deguito that her president, Lorenzo Tan had knowledge of the fund transfer (she was subsequently accused of libel as a result) is a grave one and it is one of the points of the story that is being followed.

There is also the issue of the remitting agency, Philrem, which a Senate witness Kim Wong said still has the $17 million. The huge transaction in this instance had led to curious netizens looking at other possibilities as well as the big amount of dollar deals that were heretofore unknown till the cyberheist cropped up.

And now comes the assertion by the Bangladesh Ambassador John Gomes that it was not possible for just the Jupiter branch to carry on the misdeed. For Gomes, it was not only Deguito who was involved. There ought to be other officers of the bank who were involved.

How this story will play out is anyone’s guess but for sure the Bangko Sentral ng Pilipinas is right now looking at RCBC with eagle eyes to determine what violations the bank committed that would PNoy

be dealt with with sanctions or monetary fines.

For bankers say that the BSP is very strict in zeroing in on violations that banks commit in the course of their business. According to United Coconut Planters Bank Director Jesus Arranza, during board meetings, he learned about the monetary fines that the BSP has imposed on the bank for violations committed even on the matter of foreign-exchange deals.

“Napakastrikto nila,” Arranza told me in describing the Bangko Sentral during a guesting at the Kapihan sa Manila Hotel, where he described how the bank had to pay millions because of the violations it committed.

What sanctions, if ever, will be imposed on RCBC by the Bangko Sentral ng Pilipinas may not be reported anymore in keeping with the BSP mandate not to cite individual banks but the banking system as a whole when talking about certain aspects of a bank’s operation that has come under scrutiny.

For now, RCBC will come under closer scrutiny with its share price keenly watched especially as the money laundering narrative continues with he-says-she-says scenarios. At this point, RCBC will still continue to feel the heat.