Bancassurance deals of RCBC exceed P1 billion

MANILA, Philippines - Rizal Commercial Banking Corp. (RCBC) has breached the P1-billion mark in bancassurance transactions for the first time last year.

In 2008, its bancassurance deals amounted to P702.4 million, translating to a nearly 50- percent growth in 2009.

Bancassurance, or cross-selling under the Bangko Sentral ng Pilipinas (BSP) rules, is basically the sale of products by the bank’s subsidiaries or affiliates within the bank’s branches.

In the case of RCBC, that includes life insurance products offered by sister company Great Pacific Life Assurance Corp. (Grepalife).

The transaction results in fee-based income for the bank, as the life insurance product turns into a bank product.

RCBC president and chief executive Lorenzo V. Tan stressed the importance for bank personnel to religiously market various bank and non-bank products.

“Our branch personnel have only remained true to their commitment to be aggressive in customer acquisition and cross-selling, and these figures prove just that,” he said.

Bancassurance was first introduced into RCBC’s system in 2006, which included then subsidiary Nippon Life Insurance. Cross-selling transactions were worth a mere P390 million in paid premiums. Significant growth was registered towards the middle of 2007 after the re-engineering of the bank’s branches. 

The move resulted in an increase of about 30 percent year-on-year to P498.7 million paid premiums by end-2007. This was followed by a 41-percent jump in 2008 to P702.4 million.

Meanwhile, RCBC executive vice president and head of the retail banking group Ismael Sandig said management had challenged the bank to improve by leaps and bounds in each aspect of branch products.

“While we have a long way to go compared to our competitors and to the industry, our growth rate can attest to our commitment to provide complete financial solutions to our customers,” he said.

RCBC recorded an unaudited net income of P3.31 billion in 2009. Non-interest income, which includes service fees, commissions and other income, grew 29 percent due to strong trading gains. Service fees, commissions and other income, which totaled P3 billion, contributed 51 percent to total non-interest income.

Net interest income increased 21 percent to P10.2 billion as reflected by growth in the bank’s core loan business and an improvement in net interest margin.