MANILA, Philippines — Rizal Commercial Banking Corp. (RCBC) reported a 31.5 percent decline in its first quarter net income to P1.58 billion from P2.31 billion in the same period last year after incurring a net loss from trading and investment securities.
Eugene Acevedo, president and chief executive officer at RCBC, said the bank would continue to strengthen its balance sheet amid the ongoing COVID-19 pandemic.
“We will continue our prudent approach to fortify our balance sheet, roll out programs and initiatives that will support our clients, and remain agile as an organization,” Acevedo said.
RCBC managed to keep the increase in operating expenses at two percent from January to March as spending on investments and transactions related to business growth offset the savings from digital efforts and channel rationalization.
The bank’s provisions for impairment losses fell by 42 percent to P936 million from P1.6 billion following the significant build-up of reserves in 2020 in anticipation of the uptick in loan defaults due to uncertainties brought about by the pandemic.
It also continued to enhance its credit risk management through centralized portfolio monitoring and credit analytics as its loan portfolio went up by seven percent to P481.7 billion, fueled by the eight percent growth in disbursements to corporate clients and 10 percent increase in loans to small and medium enterprises (SMEs).
“RCBC continued to support the recovery and growth plans of its clients, especially those in essential sectors. Despite the quarantine restrictions, the bank strove to find innovative ways to actively engage clients and offer them a wide array of banking and financing solutions,” the bank said.
Through its COVID Assistance and Recovery (CARE) program, RCBC also continued to provide refinancing support to customers that are severely impacted by the pandemic.
In the first quarter, the bank’s net non-performing loan (NPL) ratio increased to 3.15 percent from 2.2 percent in the same quarter last year.
The listed bank said its net interest income inched up by 2.2 percent to P6.46 billion from P6.32 billion as it continued to build the asset portfolio, supported by lower funding costs.
Likewise, fee income jumped by 48 percent to P1.33 billion from P894 million as fees from investments and retail transactions surged from January to March
The increase in fees and commissions as well as the lower provisioning for bad debts was wiped out by the P35-million net loss in trading and investment securities in the first quarter, reversing the P2.16 billion gain booked in the same quarter last year due to lower realized trading gains from sale of investment securities.
Likewise, the bank’s foreign exchange gains plunged 82.9 percent to P47 million from P275 million, resulting in a 50 percent drop in other operating income to P1.85 billion from P3.67 billion.
RCBC’s total assets recorded a double-digit 12 percent increase to P800.8 billion as its deposit base grew by 15 percent to P562.9 billion. Its capital base increased to P102.5 billion, translating to a capital adequacy ratio (CAR) of 15 percent and common equity tier-1 (CET-1) ratio of 11.6 percent.
With its aggressive digital expansion, RCBC continued to introduce industry-leading digital solutions to provide safe, secure and convenient banking experience.
It also accelerated the migration of its corporate clients to RCBC Online Corporate, an electronic banking platform with a suite of cash management products, which enabled them to seamlessly perform their remote banking transactions.
“The pandemic may have challenged us in so many ways, but it has only reaffirmed our commitment to push forward with our digital acceleration in order to provide the best customer experience,” Acevedo said.
RCBC has a total consolidated network of 436 branches, 1,375 ATMs, and 1,800 ATM Go terminals nationwide.
Article and Photo originally posted by Philippine Star last May 15, 2021, 12:00am.