RCBC profit climbs 17% in first half

MANILA, Philippines — Rizal Commercial Banking Corp. (RCBC) posted a double-digit jump in earnings to P3.11 billion in the first semester despite almost doubling of its provision for probable losses due to the impact of the coronavirus pandemic.

The amount was 17 percent higher than the P2.66 billion income in the same period last year.

RCBC president and chief executive officer Eugene Acevedo said the bank remains mindful of the challenges ahead due to the impact of the  COVID-19 pandemic after a difficult first half.

“Hence, we’ve taken prudent steps to cushion the impact of this pandemic and at the same time, to continue serving our fellow Filipinos better by strengthening our digital capabilities, customer relief programs, and partnership with the government and other financial institutions,” he said.

Ma. Christina Alvarez, corporate planning head at RCBC, said in a virtual press conference the bank’s net interest income surged by 20.4 percent to P12.79 billion in the first half, while its non-interest income jumped by 21.6 percent to P8.06 billion.

Trading and foreign exchange gains soared by 80.3 percent to P5.9 billion on favorable market opportunities, allowing the bank to take a conservative approach and book higher provisions to proactively manage the headwinds that the entire industry is anticipating.

Alvarez said RCBC’s operating expenses inched up by 4.8 percent to P11.01 billion from P10.51 billion a year ago.

Alvarez also said that provision for probable losses amounted to P5.2 billion in the first semester,  almost double the P2.68 billion allocated in the same period last year due to the higher risks related to the post-lockdown environment.

According to RCBC, the bank is taking on substantial provisions for the first half, as much as 3.5 times more than the provisions set aside last year, normalized for extra-ordinary items.

Alvarez told reporters the bank has already accelerated its provisioning estimate from January to June.

“So this is really going to be bulk of it. This is probably 70 percent already of what we plan to provide,” Alvarez said.

RCBC’s loan book recorded a 17.9 percent increase to P480.28 billion in the first half of the year, while its deposit base jumped by 19.3 percent to P499.42 billion.

Its non-performing loan (NPL) ratio inched up slightly to 2.2 percent from 2.1 percent, while non-performing loan coverage ratio significantly improved to 95.4 percent from

78.6 percent as the bank aims to build sufficient buffers for COVID-related losses.

The annualized return on equity of RCBC went up to 7.4 percent and annualized return on assets to 0.9 percent. Total assets grew by 6.7 percent to P718.75 billion from P673.84 billion.

RCBC recognizes its crucial role as it joins efforts with the whole country in jumpstarting the economy during this time of pandemic. It has greatly focused on the changing needs of its customers by continuously investing in digital technology and reengineering initiatives to achieve a high level of efficiency and productivity.

“We do our best to adjust to the customers’ needs during these trying times. It can be challenging, but if we are able to provide ease and convenience in the way our customers do banking, it would be worth the effort,” Acevedo said.