RCBC net income up 30% to P3.66 billion in January-September

MANILA, Philippines - Rizal Commercial and Banking Corp. (RCBC) reported over the weekend a 30 percent increase in net income to P3.66 billion during the first nine months of the year from P2.82 billion a year ago.

The latest figure also surpassed by 11 percent the P3.3 billion net income recorded by the bank for the whole of 2009.

This resulted in an annualized return on equity of 16.65 percent and return on assets of 1.72 percent.

This prompted RCBC president and chief executive officer Lorenzo V. Tan to express confidence that the bank’s net income could reach a record P4 billion by the end of 2010.

“RCBC’s strong performance reflects management’s success in executing its strategy of continued strong growth,” Tan said.

Net interest income expanded by 8.32 percent to P8.18 billion during the nine-month period.

Sustained margins and improved funding mix contributed to the rise in net interest income as low cost funds grew by 15.89 percent.

Other operating income grew by 43.63 percent to P6.59 billion, an increase of P2 billion over the same period last year due to the 14.89 percent growth in commissions/fees and other income. Likewise, trust fees grew by 14.92 percent, service fees by 29.04 percent, and trading and foreign exchange gains up by 71.97 percent. 

Likewise, growth in the bank’s core retail banking, corporate banking, and small and medium enterprises (SME) businesses supported by gains from treasury operations spurred the RCBC’s strong performance.

Operating expenses grew by just 9.74 percent as the bank continued to expand its branch and ATM network in order to increase reach and improve customer convenience.

As of the end of September, the bank’s branch network reached 349 from 335 in 2009. This includes the continuing integration of JP Laurel Bank branches into the RCBC network. The bank now has 554 ATMs compared to 466 in September 2009.

Provisions for doubtful accounts totaled P2.7 billion for year-to-date September 2010, or 63.4 percent higher than the P1.65 billion posted in the same period last year.

“The bank continued to build its financial strength following a deliberate strategy of prudent balance sheet management,” he pointed out. 

Meanwile, the bank’s total consolidated resources reached P294.54 billion, an almost 10 percent expansion from the P267.9 billion posted in the same period last year. Loans grew by 8.11 percent to P156.68 Billion. 

Total deposits reached P215.69 Billion, 10.09 percent higher than the P195.93 billion in the same period last year. The broadening of its distribution channels via expansion of its branch and ATM networks, the set-up of electronic banking facilities and the introduction of new retail banking products, all contributed to the growth in deposits.