MANILA, Philippines — Yuchengco-led Rizal Commercial Banking Corp. (RCBC) posted a 7.1 percent growth in net income to P3.33 billion in the first half from P3.11 billion in the same period last year as earnings more than doubled in the second quarter alone.
Ma. Christina Alvarez, head of corporate planning group and corporate information officer at RCBC, said in a virtual press briefing the financial performance in the first six months reflects the bank’s strategy to grow in select segments while managing risks arising from the impact of the COVID-19 pandemic.
“We can sustain our performance for the first half on to the second half of the year and hit a double digit growth over 2020,” Alvarez said.
For the second quarter alone, the bank’s earnings more than doubled to P1.75 billion from P802 million in the same period last year as provision for potential loan losses dropped by 61 percent to P1.39 billion from P3.6 billion a year ago.
RCBC’s gross income increased by 13 percent to P16.91 billion from January to June compared to P14.97 billion in the same period last year on the back of the bank’s asset build-up strategy and robust fee income growth, while operating expenses rose by only 1.4 percent to P11.16 billion from P11.01 billion because of business process reengineering and rationalization efforts.
Net interest income grew by six percent to P13.58 billion from P12.81 billion, while non-interest earnings fell by 56 percent to P3.53 billion from P8.04 billion despite the 47 percent jump in fee income amid the pickup in investments and retail transactions.
Alvarez said the listed bank reinforced its credit buffer by recognizing P2.3 billion in provision for impairment losses in the first half of the year, 55.2 percent lower than the P5.2 billion provisioning made in the same period last year.
Despite the two percent industry decline, Alvarez pointed out that RCBC’s loan book increased by 9.6 percent to P483.94 billion from P441.47 billion amid the 19 percent expansion in corporate loans, 17 percent in the small and medium enterprises (SMEs) segment and four percent in the consumer segment.
Likewise, Alvarez said the bank’s deposit base jumped by 19.8 percent to P598.14 billion from P499.42 billion amid the sustained growth momentum in checking account and savings account (CASA) deposits as RCBC ramped up its digital channels while rationalizing its branch network.
Alvarez said the bank’s non-performing loan (NPL) ratio picked up steadily to 3.3 percent in the second quarter from 2.9 percent in the fourth quarter and 2.2 percent in the second quarter of last year.
For his part, RCBC chief credit officer and head of credit management group Bennett Santiago said the bank continues to help and assist customers affected by the pandemic through its COVID Assistance and Recovery (CARE) program.
“We triage each customer, and based on each assessment, offer and provide the best financial assistance package necessary. Even as the customer is still in a state of shock, denial or disbelief, we continue to provide assistance” Santiago said.
RCBC, Santiago added, has offered CARE to close to 10,000 consumers and credit card customers, as well as 300 wholesale customers mostly from the middle and SME segments.
“This crisis, it serves as a defining moment for a lot of us. For borrowing customers, it will be a defining moment based on choices that they will need. For RCBC, we choose to be here as a partner for generations,” Santiago said.
Santiago added NPLs are expected to go down in the second half after climbing in the first half with the expiration of the debt moratorium under Republic Act 11469 or the Bayanihan to Act as Heal as One Act (Bayanihan 1) and RA 11494 or the Bayanihan to Recover as One Act (Bayanihan 2).