RCBC EARNS P3.1B

Rizal Commercial Banking Corporation today disclosed an unaudited consolidated net income of P3.1 billion even as the provisions were boosted by 94% to P5.2 billion to account for the higher risks related to the post-lockdown environment. 

The bank said in its disclosure to the Philippine Stock Exchange that it is taking on substantial provisions for the first half of the year, as much as 3.5x more than the provisions set aside last year, normalized for extra-ordinary items.

The growth in net income was primarily driven by the 25% increase in gross revenues to P20.9 billion as net interest income and non-interest income grew by 20% and 32%, respectively. 

Core business continued its growth momentum complemented by the 49-basis point improvement in net interest margin to 4.3%. In addition, favourable market opportunities resulted in P5.7 billion trading gains for the first half of 2020. This allowed the bank to take a conservative approach and book higher provisions to proactively manage the headwinds that the entire industry is anticipating.

The Bank’s P718.8 billion balance sheet was supported by an P84.4 billion capital base as of June 2020, with solid capital ratios—CAR of 13.9% and CET1 ratio of 13.0%. Total deposits rose by 19% to P499.4 billion, with a CASA ratio of 53%. The Bank's funding portfolio was further strengthened by the issuance of 2-year Peso Fixed Rate Bond offering in April and July 2020. Proceeds from these will be used to support the Bank’s asset growth, re-finance maturing liabilities, and fund other general purposes.

Its diversified customer loan portfolio continued to expand by 13% to P446.4 billion, led by the small and medium enterprises (SME) and consumer loan segments which registered year-onyear growth of 23% and 13%, respectively. 

The credit card business also grew, with credit card receivables accelerating by 21%, and card base of over 908,000 reflecting a 15% year-on-year growth. For clients with credit facilities and loans, the bank has implemented a payment reprieve during the enhanced community quarantine.

RCBC's Net NPL Ratio as of June was at 2.2%, slightly higher than the 2.1% recorded in the same period last year. Meanwhile, NPL coverage ratio significantly improved to 95.4% in June 2020 compared to 78.6% in June 2019 as the Bank aims to build sufficient buffers for COVIDrelated losses.