Screengrab from www.rcbc.com
MANILA, Philippines — Rizal Commercial Banking Corp. posted a 25 percent year-on-year decline in first-quarter net profit to P1.33 billion in line with the industry-wide slowdown in trading gains.
This translated to an annualized return on equity of 12.2 percent, the bank said in a press statement on Thursday.
“During the first quarter last year, we took advantage of the favorable trading opportunities which led to hefty trading gains for the bank. This year, financial market conditions have reversed, a stricter capital adequacy regulation under Basel 3 is in place, and competition continues to be at a heightened pace. We anticipated all these early on, which made us focus on our key strengths: lending and deposit-taking,” said RCBC president and chief executive officer Lorenzo Tan.
RCBC said that consistent with the strategy of focusing on sustainable and less cyclical sources of income, its gross revenues, excluding trading gains, increased by 11.4 percent to P5 billion.
Net interest income went up by 26.3 percent to P3.84 billion in the first three months. On a quarter-to-quarter basis, RCBC said its net interest income had been steadily growing by an average of 6 percent over the last four quarters without compromising margins.
The bank’s net interest margin improved to 4.23 percent versus 4.11 percent for the same period last year.
Total fee-based and miscellaneous income reached P1.03 billion, accounting for 19 percent of the bank’s gross income.
Boosting its earning assets, RCBC grew its loan book by 24 percent to P245.4 billion for the period, buoyed by a double-digit expansion across key market segments. Loan levels of corporate, small and medium enterprise (SME), and consumer increased by 16 percent, 38 percent, and 23 percent, respectively. Meanwhile, microfinance lending through Rizal Microbank expanded its loan disbursements by 28 percent, contributing to a 93-percent increase outstanding loan portfolio.
The bank noted that despite the steady loan growth, its asset quality remained well-managed with non-performing loan (NPL) ratio of parent bank at 0.54 percent and consolidated NPL ratio at 1.08 percent. Parent bank reserve cover stood at 113.84 percent.
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