RCBC income drops 25% to P1.33 B in Q1

MANILA, Philippines - Rizal Commercial Banking Corp. (RCBC) has reported a 25 percent decline in consolidated earnings in the first three months of 2014 to P1.33 billion, from P1.77 billion in the same period last year.

In a statement, RCBC said gross revenues, excluding trading gains, increased 11.4 percent to P5 billion. Return on equity (ROE) and return on assets (ROA) stood at 12.2 percent and 1.3 percent, respectively.

RCBC said net interest income reached P3.84 billion, up 26.3 percent compared to P3.04 billion last year.

RCBC president and chief executive officer Lorenzo V. Tan said during the first quarter last year, the bank took advantage of favorable trading opportunities.

“However, the financial market conditions have reversed, a stricter capital adequacy regulation under Basel III is in place, and competition continues to be at a heightened pace. We anticipated all these early on which made us focus on our key strengths: lending and deposit-taking,” Tan added.

On a quarter-to-quarter basis, net interest income has been steadily growing by an average of six percent over the last four quarters without compromising margins.

Net interest margins improved to 4.23 percent as against 4.11 percent for the same period last year.

Total loan portfolio expanded 24 percent to P245.4 billion at the end of March this year.

All market segments sustained their growth with loan levels of corporate, SME, and consumer increasing 16 percent, 38 percent and 23 percent, respectively.

Thrift bank unit Rizal Microbank reported microfinance loans growing 28 percent in the first three months of the year while outstanding loan portfolio increased 93 percent.

Despite the steady loan growth, RCBC’s asset quality remained well-managed with a non-performing loan (NPL) ratio of 0.54 percent, and consolidated NPL ratio at 1.08 percent. Its bank reserve cover also stood strong at 113.84 percent.

Total fee-based and miscellaneous income reached P1.03 billion, accounting for 19 percent of gross income.

Total deposits grew 30 percent to P300.2 billion. Low-cost CASA (checking account-savings account) deposits increased by P40.1 billion or 27 percent to P186.33 billion, leading to a CASA-to-total deposits ratio of 62 percent.

Total consolidated resources grew 13.54 percent to P417.08 billion while capital funds reached P46.09 billion.

Capital adequacy ratio (CAR) of 11.31 percent while common equity Tier 1 (CET1) ratio of 10.72 percent also exceeded the minimum CET1 (with capital conservation buffer) of 8.5 percent.

“We are benefitting from this momentum. We will continue to focus on execution of our strategies in order to strengthen our banking fundamentals,” the RCBC chief executive said.

Consolidated branch network grew to 439 branches as of end-March from 424 from the same period last year. Likewise, consolidated automated teller machine (ATM) network increased to 1,163 in the first three months compared to 1,055 last year.