MANILA, Philippines — Yuchengco-led Rizal Commercial Banking Corp. (RCBC) said it expects to sustain a double-digit profit growth this year amid external headwinds including the US-China trade war as well as the global outbreak of the coronavirus disease 2019 (COVID-19).
RCBC treasurer Horacio Cebrero said in a press conference the increase in the bank’s net income would continue to be fueled by core businesses that account for about 80 percent of its total revenues.
“Hopefully with the growth that we are estimating, we will register a double-digit growth still. Answering the call of the government to support them in their infrastructure projects, there will still be a lot of consumer demand because the economy is growing,” Cebrero said.
Net income of the country’s ninth largest lender in terms of assets jumped 25 percent to P5.4 billion last year from P4.3 billion in 2018, driven by the expansion of its core business complemented by high margin, strong trading gains and higher fee-based income.
RCBC’s gross revenues surged by 35 percent to P35.9 billion as interest income from loans and receivables expanded by 21 percent driven by the solid volume growth and sustained margins across all customer segments, while non-interest income jumped by 125 percent coming from stronger contributions in treasury-related and fee-based income which includes deposit and branch fees, trust fees, and card related fees - both credit and debit cards.
“RCBC’s strong performance in 2019 sets the stage for the kind of growth we want to see in the future: produced by well positioned businesses in the key market segments we operate in through innovative products and quality service,” RCBC president and chief executive officer Eugene Acevedo said.
Total assets expanded by 18 percent to P771.3 billion with investment securities and regular loans (net of interbank loans) driving the growth at 36 percent and 11 percent, respectively.
RCBC’s capital funds stood at P83.2 billion and well above the minimum regulatory requirement with a capital adequacy ratio (CAR) of 13.8 percent and Common Equity Tier (CET1) ratio of 12.9 percent. Return on equity (ROE) recorded an improvement of 69 basis points to 6.5 percent.
The merger between RCBC and its thrift bank RCBC Savings Bank last July boosted its consumer lending business that currently accounts for at least 30 percent of the bank’s total loan portfolio.
RCBC’s small and medium enterprises as well as consumer loan segments saw solid double-digit growth of 29 percent and 18 percent, respectively.
“The SME and consumer segments have been the center of much of our expansion. Our continued investments in digital technology and efforts in process improvement are focused on servicing these customers better. We are all set to unlock the potential of these markets,” Acevedo added.
Ma. Christina Alvarez, corporate planning head and corporate information officer at RCBC, told reporters the bank’s loan book grew by 11 percent to P425 billion, while its deposit base went up by eight percent to P457 billion.
Alvarez said consumer loans jumped by 18 percent and accounted for 23 percent of total loans, while SME loans surged 29 percent for a share of seven percent.
On the other hand, she added the share of corporate loans declined to 53 percent last year from 56 percent in 2018.