Money laundering fine gnaws on RCBC’s profit

Yuchengco-led Rizal Commercial Banking Corp. (RCBC) saw around 3.7-percent drop in nine-month net profit to P3.5 billion partly due to the monetary penalty slapped by banking regulators in relation to a recent money laundering case.

“Excluding trading gains and the one-off item relating to the BSP (Bangko Sentral ng Pilipinas) supervisory enforcement action, core earnings increased by 33 percent year-on-year,” RCBC disclosed to the Philippine Stock Exchange on Friday.

Last August, the BSP slapped a monetary penalty of P1 billion against RCBC in connection with the Bangladesh Bank cyberheist, of which $81 million slipped through the bank’s Jupiter Street branch early this year. RCBC agreed to pay the amount in two equal tranches over a one-year period.

Annualized return on equity and return on assets stood at 7.82 percent and 0.94 percent, respectively.

RCBC reported that net interest income reached P11.86 billion for the nine-month period. This marked a 3.5 percent improvement over the net interest income of P11.46 billion reported in the same period last year.

The bank’s net interest earnings represented 67.5 percent of the bank’s gross income of P17.56 billion.

Annualized net interest margin (NIM) was maintained at 4.12 percent, which the bank attributed to “healthy margins in the consumer loans which expanded by 20 percent.”

Other operating income was up by P237 million year-on-year to P5.70 billion and represented 32.5 percent of total gross income. This was driven by higher foreign exchange and trading gains as well as miscellaneous income.

Total fees and commissions reached P2.57 billion and accounted for 45 percent of other operating income.

Excluding one-off items, other operating expenses grew by 8.63 percent year-on year to P12.06 billion primarily due to the expansion in the branches and automated teller machine (ATM) network.

In terms of asset quality, consolidated non-performing loans stood at 0.97 percent of total loans while consolidated bad loan buffer ended at 93.29 percent of total.