RCBC H1 profit drops 15.5% to P1.53 B

The Rizal Commercial and Banking Corp. (RCBC) reported a 15.5 percent decline in net income for the first six months of 2008.

From P1.81 billion last year, first semester earnings fell to P1.53 billion this year due mainly to the marked slowdown in the country’s economic activity.

For the whole of 2007, the commercial bank of the Yuchengco Group of Companies reported net earnings of P3.2 billion.

“The slowdown in both the local and global economic environment coupled with the increase in inflation, made it a challenging six months for the whole banking industry. The bank continued to pursue its core strategies, on building financial strength, expanding market reach and improving customer service quality,” Lorenzo V. Tan, RCBC president and chief executive officer, said.

Nonetheless, a strong performance by its deposit and loan business expanded consolidated assets by 14.6 percent to P255.2 billion at the end of June 2008, from P222.8 billion in the same period last year.

Deposits grew to P185.5 billion, or 18.3 percent higher than the P156.7 billion in the same period in 2007. Low cost deposits increased by 18.6 percent, reaching P83.3 billion from the P70.2 billion in June 2007.

Total loans and receivables grew by 35.2 percent from P103.2 billion to P139.5 billion. In terms of the consumer loans business, net loans of RCBC Savings Bank, increased by 14.6 percent from P26.1 billion to P29.9 billion.

Non-performing loan (NPL) ratio fell to 4.1 percent as of end June 2008, from 6.7 percent in the same period last year. Capital adequacy ratio (CAR) stood at a healthy 20.97 percent.

“The bank continues to improve asset quality, such as in the area of non-performing assets. RCBC has one of the highest disclosed ratios among private local banks,” Tan added.

RCBC so far has 324 branches and 331 automated teller machines (ATMs). It has likewise introduced new and improved electronic banking channels and new retail banking products.

Recently, it acquired a state-of-the-art system from Infosys that will allow it to offer one of the most thorough and secure Internet banking solutions available. 

“The new system, which is the latest Internet banking system launched by Infosys for the retail market will let us run a virtual branch on the net. While most other local banks provide customers Internet access for their basic banking transactions such as deposit inquiries, fund transfers and even bills payment, our new system will allow RCBC to offer services way beyond these basics,” Tan added.

Late last year, RCBC acquired the 30-year old thrift bank Merchants Savings and Loan Association Inc. from Finman Capital Corp. The acquisition included the 21 operating branches, seven of which are in Metro Manila.

“We are still open to acquisitions, and our preference is smaller banks (in the case of commercial banks) and relatively larger ones (in the case of thrift banks),” the RCBC president said. – Ted Torres