RCBC focuses on consumer banking

The Rizal Commercial Bank Corp. (RCBC) is concerned about the political uncertainties of the May national elections and threats of higher interest rates this year.

Newly-installed president Francisco S. Magsajo Jr. said that they are putting more emphasis on consumer lending among others as corporate lending remains flat.

"A lot of our strategies remains uncertain although loan growth must grow over 10 percent," Magsajo said yesterday.

The RCBC like most financial institution have preactically written off the first half of the year for any major business developments as the national elections have taken centerstage. New investments or expansions are not expected until after the election which must be perceived as credible. Likewise, the new administration must make clear its program of action prior to any commitments by business.

"Hopefully, the second half may bring new investments and business activities will pick up," bank officials added.

Nonetheless, the Yuchengco-led RCBC will aggressively rely on greater lending particularly on the consumer side.

That means retail and consumer lending especially in housing and automobile. Salary loans, credit cards, overseas remittance, and other retail activities have increased their significance to bank’s bottomline, and the includes other fee-based sources of income.

"That is where the grow will come from this year," Magsajo said.

Meanwhile, threats of a high interest rate regime this year may see the weakening of bigger investments in government securities. Reports that the US Federal Reserve will increase interest rates between 100 to 200 basis points this year did not help ease fears that he country will go the same route.

At the same time, the national government is expected to increase its borrowings domestically and overseas which could depress the treasury business of banks as well as compete directly with the private sector for funds.

RCBC’s net earnings reportedly grew between P1.4 to P1.5 billion in 2003 or slightly better than the P1.3 billion realized the previous year.

Officials refused to make any statements as towards their profit outlook for 2004 although achieving the same rate of growth as 2003 was not farfetched.