Rizal Commercial Banking Corp., one of the country’s largest lenders and a member of the Yuchengco Group of Companies, expects a double-digit growth in net income this year from a P5-billion profit in 2020 on renewed strength of core businesses despite the lingering global health crisis, a top executive said Monday.
RCBC corporate information officer and head of corporate planning group Christina Alvarez said in an online briefing the bank was optimistic about sustaining its performance in the first six months when it posted an unaudited consolidated net income of P3.3 billion, up 7 percent from the same period last year.
“We believe that we can sustain the first-half performance… We can’t predict how much because of the current enhanced community quarantine… Our forecast does not consider further ECQs [enhanced community quarantine],” Alvarez said.
“But we see a double-digit growth [in net income] over 2020,” Alvarez said.
RCBC posted a 7.4-percent decline in net income last year to P5 billion from P5.4 billion in 2019 as it boosted impairment losses to P9.3 billion.
The government earlier imposed a two-week lockdown in Metro Manila and other provinces from Aug. 6 to 20 to curb the further spread of COVID-19 pandemic. Some analysts predicted that the ECQ might be extended as the new cases of infections kept rising.
Alvarez said the first-half net profit of P3.3 billion was driven by the sustained expansion in the customer loan business which grew 9 percent, even as the industry contracted by 2 percent.
She said the 28-percent growth in low-cost CASA (current and savings account) deposits performed better than the industry. Investment securities rose 3.4 times, and fee income surged by 47 percent as investments and retail transactions picked up during the period.
RCBC’s solid loan growth despite the industry decline was fueled by the expansion of the corporate and small and medium enterprise segments by 10 percent and 17 percent, respectively.
Gross Income, net of trading and foreign exchange gains, went up 13 percent year-on-year to P16.9 billion, on the back of asset build-up strategy and robust fee income growth.
The bank closely managed operating expenses through business process reengineering and rationalization efforts. Operating expenses of P11.2 billion was marginally higher year-on-year by 1 percent.
RCBC reinforced its credit buffer, recognizing P2.3 billion in provisions for impairment losses in the first half which was lower by 55 percent than in the same period last year.
The bank’s net non-performing loan ratio stood at 3.2 percent. RCBC’s total assets rose 18 percent to P845.8 billion, with loans and receivables and investment securities comprising 50 percent and 21 percent of the total, respectively.
The growth was supported by the 20-percent jump in total deposits, and the 23-percent increase in capital funds with solid capital ratios—CAR of 15.1 percent and CET1 ratio of 11.8 percent.
Annualized return on equity stood at 6.6 percent and annualized return on assets reached 0.8 percent.
The bank announced in June the strategic investment by Sumitomo Mitsui Banking Corp. for a 4.99-percent stake in RCBC. The block sale of RCBC’s 101,850,000 common shares was executed on July 23, 2021.
The partnership will leverage on synergies to further boost the bank’s digital banking capabilities and corporate and consumer finance business.
RCBC had a consolidated network of 434 branches, 1,272 automated teller machines, and 1,535 ATM Go terminals strategically located nationwide as of end-June.
Alvarez said the bank was planning to put up more branches “in select areas” in Metro Manila as it aims to further widen its reach.
