RCBC reports 33% hike in 2005 net profit to P1.6B

The Yuchengo-controlled Rizal Commercial Banking Corp. (RCBC) reported an audited net income of P1.6 billion last year, or 33 percent better than the previous year’s profit of P1.2 billion.

RCBC executive vice chairman and chief executive officer Rizalino S. Navarro said the earnings improvement resulted from more income from its core lending business and a larger securities portfolio.

"Faced with a challenging and a very competitive environment last year, we focused on enhancing existing strengths and capabilities. We stratified our lending markets so that there was more emphasis on profitable segments and industries," Navarro said in a statement.

Net interest income increased 38 percent to P7.2 billion, which accounted for 64 percent of total revenues.

Consolidated assets stood at P184.7 billion, buoyed by the growth in investment securities, as the bank took advantage of declining interest rates last year. Financial market assets grew 35 percent, strengthening the bank’s liquidity position.

In 2005, RCBC sold P3.5 billion worth of non-performing loans (NPLs). The bank also made significant success in disposing of non-performing assets (NPAs) through loan restructuring, foreclosures and collections for NPLs, and sales and joint venture initiatives for foreclosed assets. "This is consistent with our strategic focus on asset quality," Navarro added.

RCBC will continue to liquidate its NPA inventory through a series of public auctions and other asset disposition schemes this year. Already, a public auction is scheduled on May 18, where some P300 million worth of foreclosed properties will be sold.

In 2004, RCBC wrote off P2.8-billion in deferred tax assets to comply with new international accounting standards on income taxes that took effect in January. It sold roughly P4.4 billion in NPLs to two special purpose vehicles (SPVs).

The bank is still looking for a strategic partner that would help increase its capital base, and bring in new businesses especially from the Asian regional market.