YUCHENGCO-led Rizal Commercial Banking Corp. grew its first-semester net profit by 25.29 percent year-on-year to P2.53 billion, driven by the expansion of core businesses.
RCBC’s six-month performance had translated to an annualized return on equity of 9.3 percent and return on assets of 1.1 percent.
“Clearly, RCBC is on-track. We are advancing on all fronts: from core lending to deposits to fee-based income. We are pleased with our first half 2015 numbers but we will continue to double our efforts in satisfying our customers and shareholders,” RCBC president Lorenzo Tan said in a press statement.
Net interest income reached P7.45 billion, accounting for 63 percent of gross income which in turn increased by 12.4 percent year-on-year to P11.8 billion.
In financial intermediation, RCBC achieved an annualized net interest margin of 4.2 percent, remaining one of the highest in the sector.
Core lending business was sustained with loan book – excluding interbank loans – expanding by 18 percent year-on-year to P275.7 billion in the first semester. All market segments sustained their growth in average loan volumes. The corporate, consumer and small and medium enterprise (SME) segments expanded by 20 percent, 18 percent, and 30 percent, respectively.
RCBC reported that SME lending now accounted for 12 percent of its total loan portfolio, in line with the bank’s strategy. Meanwhile, microfinance lending through Rizal Microbank grew loan portfolio by 46 percent.
Interest income from the lending business contributed 83 percent of the total interest income of the bank. In terms of asset quality, the parent bank’s non-performing loan portfolio stood at 0.24 percent of total loans while coverage of bad loans stood at 159.13 percent.
Other operating income went up by 50.21 percent to P4.3 billion with securities trading gains contributing P1.72 billion. Total fee-based and miscellaneous income increased by 23.23 percent year-on-year to P2.53 billion. Improved contributions came from the following: investment banking-related income which increased by 198 percent; bancassurance which went up by 148 percent; and, fees from loan-related transactions which increased by 37 percent.
Total deposits ended the semester at P321.9 billion, of which 63 percent consisted of low-cost current account/savings account deposits.
The bank grew its balance sheet by 9 percent to P468.7 billion. Capital funds stood at P62.4 billion.
RCBC’s distribution network grew to 450 branches from 439 year-on-year while the ATM (automated teller machine) network increased to 1,208 from 1,163. This resulted in a 2.68 branch-to-ATM ratio, one of the highest in the industry.
For 2015, RCBC said it would focus on reducing transaction unit cost by deploying 120 paperless banking staging terminals in various branches nationwide, cutting transaction time by half.