RCBC profit hits record P7.1 billion after strong Q4

MANILA, Philippines — Yuchengco-led Rizal Commercial Banking Corp. (RCBC) recorded a 41 percent jump in earnings to hit a record high of P7.08 billion last year from P5.02 billion in 2020, boosted by the strong performance of its core businesses amid the pandemic.

For the fourth quarter alone, the bank’s net income soared by 71.6 percent to P1.74 billion from P1.02 billion in the same period in 2020.

Outgoing treasurer and head of treasury group Horacio Cebrero said in a virtual press briefing that the listed bank has seen a positive momentum despite the challenges in mobility for most of 2021 due to the pandemic.

“From the start of the year, the bank never lost focus on its view on the country’s ability to return to an acceptable growth trajectory,’’ Cebrero said.

Cebrero said RCBC would continue to invest and innovate in the ever-changing customer needs as well as strengthen the bank’s balance sheet and internal processes.

“We ended the year (2021) with a strong number and view the coming year (2022) with a very positive outcome,” Cebrero said.

RCBC head of asset management and liability in treasury group Alberto Magno Pedrosa will replace Cebrero whose retirement takes effect on March 4.

Ma. Christina Alvarez, head of corporate planning and investor relations at RCBC, reported that RCBC booked a 13.1 percent increase in gross income to P35.35 billion in 2021 from P31.25 billion in 2020.

The increase was fueled by the 9.7 percent rise in net interest income to P28.83 billion, as the bank built up its loans and receivables, as well as the 29 percent jump in fee-based income to P4.94 billion on the back of robust investment banking engagements and higher transaction volumes.

Alvarez said RCBC managed to control the rise in operating expenses at only 2.2 percent to P22.53 billion, as provision for impairment losses plunged by 35.5 percent to P6.05 billion in 2021 from P9.37 billion in 2020, resulting in a lower non-performing loans (NPLs) cover of 63.7 percent.

The publicly held bank recorded a slight uptick in soured loans or NPL ratio to 3.3 percent last year from the previous year’s 2.9 percent.

RCBC chief credit officer Bennett Santiago said the non-performing loans in the wholesale and consumer loans have already peaked.

“Provisions moving forward will basically be driven by just business as usual type of delinquencies. And when I say it has peaked, a lot of delinquencies we saw starting from the second half of 2020 are generally within expectations. And part of what drives our NPL reductions for the whole year is as we start building payment traction on all of those we have helped through the crisis in terms of loan modification,” Santiago said.

RCBC’s loan book recorded a 13.2 percent increase to P507.74 billion last year from P448.6 billion a year ago, fueled by the 19 percent rise in lending to small and medium enterprises (SMEs), as well as the 15 percent increase in disbursements to the corporate segment.

Likewise, its deposit base jumped by 25.5 percent to P672.46 billion from P535.79 billion, supported by low-cost current account and savings account (CASA) deposits.

Furthermore, the P4.5 billion capital infusion from Japan’s Sumitomo Mitsui Banking Corp. for a five percent stake translated to a 9.6 percent increase in capital base to P959 billion. This boosted RCBC’s capital adequacy ratio to 15.2 percent and common equity tier 1 ratio to 12.2 percent.

For 2021, the Yuchengco-led bank booked a return on equity of 6.7 percent and a return on assets of 0.8 percent. Its network comprised of 434 branches, 1,245 ATMs, and 1,589 ATM Go terminals nationwide.