RCBC's first half income up 24.8% to P2.1 billion

MANILA, Philippines - The Rizal Commercial Banking Corp. (RCBC) has reported a net income of P2.11 billion in the first six months of 2010, or 24.8 percent higher than the P1.69 billion reported in the same period last year.

In fact, earnings in the first semester of 2010 almost equaled the 2008 full year net income of P2.15 billion. Last year, RCBC recorded an unaudited net income of P3.31 billion, 53.9 percent better than that of 2008.

RCBC president and chief executive officer Lorenzo V. Tan said that the commercial bank of the Yuchengco Group of Companies remains focused on “a strategy of growth.”

“RCBC continues a strategy of growth in the core business lines, of improving execution abilities, and expanding distribution platforms, with deepening customer relationships,” Tan said. 

This strategy so far has resulted in a return on equity of 14.64 percent and a return on assets of 1.52 percent.

Net interest income expanded to P5.48 billion, higher by P543 million or 11 percent from the previous year. Sustained margins and improved funding mix contributed to the rise in net interest income as low cost funds, which grew by 19.8 percent.

Other operating income grew by 19.7 percent to P3.19 billion, coming mainly from commissions expanding by 24 percent, trust fees growing by 14 percent, service fees increasing by 20 percent, and trading gains up by 60 percent. 

The bank’s core retail banking, corporate banking, and small and medium enterprises businesses, as well as gains from treasury operations spurred its strong performance.

Total consolidated resources reached P283 billion, or 10 percent higher than the P257 billion posted in the same period last year. Loans grew by six percent to P159.6 billion. 

Deposits totaled P208.8 billion as of end-June 2010, or 11.3 percent higher than the first semester of 2009 numbers of P187.7 billion. 

The improvements of its distribution channels via expansion of its branch and ATM networks, and putting in place electronic banking facilities such as RCBC AccessOne Internet Banking and the introduction of new retail banking products such as RCBC MyWallet, which has over 940,000 cardholders, all contributed to the growth in deposits. 

Operating expenses meanwhile grew by 10 percent as RCBC continued to expand its branch and ATM network.

At the start of July, the bank’s branch network reached 344 from previous 334 in 2009. This includes the continuing integration of JP Laurel Bank branches into the RCBC network. The bank now has 523 ATMs compared to 452 in June 2009. Provisions increased by 16 percent to P1.07 billion.

It has remittance subsidiaries and tie-ups in North America, Europe and Hong Kong.

The parent bank’s capital adequacy ratio (CAR) stood strong at 17.52 percent as of June 2010, with much leeway for asset growth from the minimum regulatory requirement of 10 percent.   Tier 1 ratio of 13.23 percent also exceeded the Bangko Sentral ng Pilipinas (BSP) minimum preferred level of six percent.

During the first half of the year, RCBC successfully issued $250-million in five-year senior notes and completed the issuance of P5-billion long-term negotiable certificates of deposit to further strengthen its long-term liquidity position.