RCBC pumps in additional P800 million into leasing arm

MANILA, Philippines — Yuchengco-led Rizal Commercial Banking Corp. (RCBC) is pumping in P800 million in additional capital into its leasing and financing subsidiary to support the growing business.

RCBC corporate information officer Ma. Christina Alvarez said in a disclosure to the Philippine Stock Exchange (PSE) the additional capital infusion into RCBC Leasing and Finance Corp. was approved by the bank’s board of directors last Aug. 28.

RCBC owns 97.8 percent of the leasing firm formerly known as First Malayan Leasing and Finance Corp. It serves the requirements of corporate, commercial and consumer markets through its innovative loans, leases and investment products.

On the other hand, RCBC Rental Corp. is engaged in renting and leasing business machines, transport vehicles, and heavy equipment under an operating lease arrangement.

Earnings of RCBC Leasing and Finance went up by more than 25 percent to P88.29 million last year from P70.22 million in 2016. Its return on average equity improved to 13.64 percent from 11.23 percent.

For the first half, the company’s net income surged by 38.5 percent to P60.08 million from P43.37 million in the same period last year. Its return on average equity improved further to 14.19 percent from 13.6 percent.

The Yuchengco-led bank has committed to infuse P2.8 billion to major subsidiaries as part of its efforts to sustain the growth momentum of its core businesses.

Aside from its leasing and financing arm, RCBC committed to inject P2 billion in additional capital to wholly-owned RCBC Savings Bank Inc. (RSB) to help sustain the 20 percent growth in its consumer lending business.

RCBC’s consumer banking arm has 154 business centers and 459 ATMs nationwide providing deposit products, real estate loans, auto loans, and personal loans. RSB is the country’s third largest thrift bank in terms of assets.

The profit of RSB was almost flat at P629.31 million in the fist half from P632.9 million in the same period last year.

As a whole, the earnings of RCBC declined by 6.4 percent to P2.2 billion in the first half from P2.35 billion in the same period last year amid the double-digit increase in expenses.

RCBC said the bank’s core income, excluding non-recurring income or trading gains, jumped by 47 percent in the first semester, reflecting the continued robust growth in earnings from core businesses.