RCBC Savings supports SMEs

MANILA, Philippines - The RCBC Savings Bank (RSB) will put more emphasis on the small and medium enterprise (SME) market in the next three to five years.

“We want to expand our SME lending, and we want it to compliment the existing SME lending of the Rizal Commercial and Banking Corp. (RCBC),” Rommel S. Latinazo, RSB president, told The STAR.

RCBC is the universal bank of the Yuchengco Group of Companies, and RSB is the thrift bank arm of the conglomerate.

Latinazo said that the thrift bank is going to change the complexion of its lending program from a purely consumer lending portfolio.

“We will expand to the SME market which has a huge potential for growth and profits,” the newly-installed bank president said.

He explained that the thrift bank is looking at parent financial institution RCBC, has had extensive experience in the SME market, to speed up RSB’s serious bid to tap its huge potential. “We do not have to re-invent the wheel.”

Latinazo said that the ground works and systems will be undertaken within 2011, and the thrift bank expects the full benefits will be realized after 2011.

RSB is ranked third largest among the thrift banks behind pacesetter BPI Family Savings Bank and the Philippine Savings Bank (PSBank). All three players are allied to major commercial banks including the Bank of the Philippine Islands (BPI), the Metropolitan Bank & Trust Co. (Metrobank), and RCBC.

However, RSB is widely perceived as a poor third in the race for top honors, with the first two constantly jocking for the number one post. As of June this year, RSB ranked fourth in terms of total assets, and third in terms of loans, deposits and equity.

The bank president admits that their strategic goal is to crowd BPI Family Savings and PSBank, and in the process pull away from fourth largest thrift bank, the Planters Development Bank.

RSB already operates 117 branches and will open two more within the next months. Next year, another 10 branches are targeted to be operational and double that figure in the case of its automated teller machines (ATM) network.

A minimum of 12 ATMs would be activated equivalent to the number of new branches, and a dozen more for offsite units.

Complimenting the branch and ATM network, is three new lending centers to beef up its existing 12 lending centers. Lending centers are generally situated physically within a branch, but brandish a provincial outlook.

These are situated in major urban centers such as Cebu City, but its operation scope will depend on the maturity of the market.

Meanwhile, its strategic goals are justified with its 38.6-percent increase in net earnings in the first nine months of 2010, or from P579 million in the same period in 2009 to P803 million this year.

In fact, it already surpassed the 2009 full year income of P800 million. Net earnings in 2008 amounted to P776 million and at P691 million the year before.

Annualized return on equity (ROE) thus reached of 16.8 percent and a return on assets figure of 2.15 percent after September 2010.

Total assets ballooned to P52.7-billion, loans reached P33.2 billion and deposits accumulated to P44.2 billion.

The bulk of the loans are in the consumer or retail market. Nearly 49 percent of the loan portfolio is mortgage or housing loans, followed by auto loans accounting for 47 percent. The remaining loans are personal or salary loans.

Latinazo said that the thrift bank’s capital adequacy ratio (CAR) was above the minimum 10-percent required by the Bangko Sentral ng Pilipinas (BSP).

“Our non-performing loan (NPL) ratio is better than industry, and our provisioning is adequately provided to maintain good margins,” he added.

RSB is reportedly setting up the infrastructure for Internet banking, a must platform for all progressive banks today.