RCBC sees flat income growth this year

MANILA, Philippines - Rizal Commercial Banking Corp. (RCBC), the main banking unit of the Yuchengco Group, expects a flat income growth this year at P5.4 billion, the same estimated earnings level in 2013, a bank official said.

RCBC executive vice president and head of strategic initiatives John Thomas Deveras hinted the increase in interest rates in 2014 would likely impact on the bank’s operations.

Despite the projected flat income growth this year, he said the bank’s loan portfolio would likely increase by 20-30 percent with the expected rise in corporate accounts as the government continues to push for Public-Private Partnership (PPP) programs. Other loan drivers, he said would be growth in loans from small-and-medium enterprises (SMEs) and consumer loans such as  auto and housing.

Deveras said they also plan to put up 15-20 new branches this year, consistent with the bank’s annual branching target for the past years.

At present, the bank has 427 branches of which 60 percent are located outside Metro Manila.

It also plans to put up 600 additional  automated teller machines (ATMs) nationwide. It currently maintains 1,100 ATM units.

As this developed, RCBC also announced the transfer of the management of its credit card business to newly-formed RCBC Bankard Services Corp. (RBSC) after completing the sale of its 65.42 percent stake in Bankard Inc. last Dec. 27.

With the new corporate name, RBSC president and CEO Oscar Biason said they hope to increase the number of their cardholder base by 150,000 from the present level of 600,000.

“Aside from enhancing the bank’s product offering and customer reach, this transaction will allow RCBC to book a net gain of P69 million while RCBC Capital will recognize a net gain of P54million,” Deveras said, explaining the rationale for the reason to create a new credit card vehicle for the bank.

“RCBC’s net gain on sale is about P123 million, after taking into account net gain after taxes and fees. The bank will now have the capability to release around P731 million of common equity Tier 1 capital and could possibly lead to an increase in our loan books,” he said.

Deveras said the sale of their stake in Bankard Inc. is also part of the bank’s capital raising/capital release program in compliance with the new Basel 3 capital guidelines that took effect last Jan. 1.

Biason, on the other hand, assured their customers they would continue to deliver the same level of dedication and commitment in client servicing and offering innovative solutions to meet their needs and exceed expectations.