Despite the lower growth forecasts for the Philippine economy this year after a strong 2007 performance, the RCBC Savings Bank is forecasting a 29 percent increase in net income for 2008.
External pressures weighing on the economy are the record-setting levels of world oil prices and the recession of the economy of the United States.
Likewise, the Bangko Sentral ng Pilipinas (BSP) is under a lot of pressure, having to balance between high inflation, liquidity and US Fed rates. These in turn will affect treasury gains for most banks.
Most banking institutions believe that the BSP will try to maintain the present level of interest rates, or increase it but maintain alternative routes for financial institutions.
It also remains to be seen how the Filipino consumers’ appetite will go.
RCBC Savings Bank president Lope M. Fernandez Jr. is optimistic that consumption will remain strong albeit weaker than the previous year.
“Our target this year is a net income of P900 million, almost 29 percent stronger than the P700 million recorded in 2007. In 2006, net earnings were registered at P400 million,” Fernandez said.
The thrift bank of the Yuchengco Group of Companies is also looking to increase its deposit and loan portfolio to grow by another 20 percent this year.
Total loan portfolio stood at P30 billion while total deposits closed the year at P33 billion.
Loan portfolio is basically consumer or retail loans in the areas of personal loans, mortgage loans and auto loans. Mortgage and auto loans account for over 98 percent of total portfolio while personal loans are making significant headway for RCBC Savings.
Meanwhile, Fernandez remains optimistic that its consumer loans will continue to grow especially in the automobile market.
“The Filipino consumer is very resilient. They have an appetite for new auto models, which are more fuel efficient than ever,” the thrift bank president said.
The auto consumer is shifting from being a long-term owner to one that looks for options over a three- to five year period. “The Filipino car owner thinks much like their US counterparts.”
Meanwhile, the thrift bank plans to open at least six branches including Zamboanga, and a fifth branch in bustling Cebu this year. It presently has 110 branches nationwide.
Twenty percent of its various banking business is related to the cash-rich overseas Filipino workers (OFWs) and migrant Filipinos.
RCBC Savings Bank was ranked last year as third best in terms of loan portfolio, third in terms of branch network size, and fourth in terms of assets. It is wholly-owned by the Rizal Commercial Banking Corp. (RCBC).
Last year, RCBC declared an unaudited net income of P3.21 billion, which is 56 percent better than the 2006 earnings of P2.05 billion. It is also higher than the original target of P3 billion. Consolidated resources by P15 billion from P224 billion end of 2006 to P239 billion end December 2007.
Total deposits grew to P176 billion, up by P19 billion with peso deposits mounting to P137 billion and foreign currency deposit unit (FCDU) at P39 billion.