RCBC bares 47% earnings growth

MANILA, Philippines - Rizal Commercial Banking Corp. (RCBC) reported yesterday a 47-percent growth in net earnings in the first nine months of 2009 to P2.82 billion.

In a statement to the Philippine Stock Exchange, the Yuchengco-owned bank said operating income amounted to P12.11 billion, with net interest income and non-interest income increasing 19.4 percent and 18.3 percent, respectively. 

Net interest income amounted to P7.55 billion, higher than the previous year’s P6.32 billion while non-interest income grew from P3.85 billion to P4.56 billion, primarily accounted for by the strong growth in trading gains, RCBC said.

The results also reflect a P739-million increase in provisioning to provide for future contingencies, loan losses and losses from the recent typhoons.

“RCBC adopted strategies meant to prepare itself for a volatile economic environment in 2009. We raised an additional P4.2 billion in Tier 2 capital, sustained an aggressive low cost deposit campaign, exercised prudence in its loan approvals and achieved exceptional trading gains by riding the market’s volatility successfully,” Lorenzo V. Tan, RCBC president and chief executive officer, said.

The bank likewise lengthened the maturity profile of its foreign currency books through the issuance to its client base of $98.2 million in three-year negotiable certificates of deposit.

Cost-to-income or efficiency ratio stood at 58 percent, much improved from 64 percent as of the same quarter last year. 

“The improvement in the efficiency ratio was tempered by the aggressive expansion in branches and ATMs. Excluding branch expansions, management exercised tight control over variable operating expenses,” Tan added.

Meanwhile, total consolidated resources reached P269.4 billion, or 8.5 percent better than last year’s P248.3 billion. The growth was funded by the P16.3 billion expansion in deposits from P179.7 billion to P196 billion.  

Net loans and receivables grew eight percent from P134.2 billion to P145 billion. SME lending was especially strong, expanding 18 percent from P7.6 billion to P9 billion.

Total liabilities, meanwhile increased by P19.1 billion from P 220.3 billion to P239.4 billion.

Total capital funds also expanded to P30 billion, pushing the capital adequacy ratio (CAR), on consolidated basis, to 19.26 percent from 17.3 percent at end 2008.

Non-performing loans (NPL) ratio stood at 3.12 percent while the non-performing assets (NPA) ratio improved to 4.61 percent.

RCBC infused P175 million into President Jose P. Laurel Rural Bank Inc. in the first quarter of 2009. The rural bank will become the platform for RCBC’s microfinance operations in Southern Luzon.

RCBC is the country’s fourth largest private universal bank in terms of capital base. It presently operates 335 branches and 469 automated teller machines nationwide.