RCBC income down 33%

MANILA, Philippines - The Rizal Commercial and Banking Corp. (RCBC) have reported a 32.9-percent decline in consolidated net income, or from P3.21 billion in 2007 to P2.15 billion last year.

Principal factor for the income decline was lower treasury gains.

“2008 was a challenging year as interest rates spiked in July 2008. We also locked in our gains early in 2007 because of expected volatility in 2008. The strategy gave us our 56-percent increase in net income in 2007,” Lorenzo V. Tan, RCBC president and chief executive officer, told The STAR.

Tan pointed out nonetheless that core earnings from lending and fee income activities continue to grow.

“We are pleased with the momentum in our corporate, SME and consumer businesses. Our distribution through branches, ATMs, and electronic channels has grown the past two years allowing us to serve a million new customers,” he added.

Interest income from loans grew by 13.6 percent on aggressive expansion of its loan portfolio in the various market segments.

Fees and commissions likewise increased by 37 percent, with the bank’s ongoing strategy to not only increase its number of customers but the volume in remittances, trust and other services that generate fee income.

This income contributor may not account for a huge portion of overall income but its continuous growth will defend grow versus the poor investment climate this year.

RCBC is a major player in the remittance business with a wide presence overseas through remittance subsidiaries and tie-ups in North America, Europe and Hong Kong. It is a member of the Yuchengco Group of Companies.

The bank’s number of customers surged to 1.8 million as of 2008.

“Our final figures reflect the effects of ongoing developments in the global economy.  But we are keeping our eyes focused on achieving our long-term goals for RCBC,” Tan added.

Total consolidated resources grew by 12 percent to P268 billion last year, for a P29-billion increase from the P239 billion in 2007.

Deposits grew to P196.23 billion, or 11.5 percent better than P 175.92 billion realized in 2007.

Driven by higher loan volumes to corporates and small and medium enterprises (SMEs), total net loans and receivables increased by 40 percent, from P 117.19 billion in 2007 to P164.41 billion last year. Loans of RCBC Savings Bank, which are predominantly consumer loans, grew by 20.4 percent.

Non-performing loans (NPL) ratio declined from the 6.12 percent in 2007 to 2.54 percent in 2008. 

Capital adequacy ratio (CAR), or the bank’s ability to absorb more risks, stood at 17.30 percent end 2008, well above the 10-percent minimum requirement of monetary regulators.

RCBC continued to expand its customer reach via traditional bricks and mortar as well as the electronic channels. Bank clients may now access their accounts and conduct basic banking services over the Internet through RCBC Access One.

At the start of 2009, the bank’s branch network stood at 324 or 23 more than its total network in 2007. This includes the continuing integration of the remaining nine Merchant bank branches into the RCBC network. Merchant’s Bank was acquired by RCBC last May 2008 in line with the general strategy of the company to focus its acquisitions of small and medium-sized banks.

Conversely, the automated teller machine (ATM) network grew to 380.