RCBC nets P3.9B

Yuchengco-led Rizal Commercial Banking Corp.’s net profit dropped by about 25 percent to P3.86 billion last year after paying a hefty fine for its involvement in an $81-million money laundering case.

RCBC president and chief executive Gil Buenaventura said: “2016 has been a very challenging year in the history of RCBC. But through it all, the bank emerged stronger and more resilient, having tested to its full capability all its resources. Now more than ever, RCBC is better-equipped, having instituted stronger measures and controls to protect the interests of all its clients.”

The Bangko Sentral ng Pilipinas slapped RCBC with a P1-billion fine last year after dirty money stolen by an international cyberheist syndicate from the central bank of Bangladesh slipped through RCBC’s branch in Jupiter St. Makati and eventually laundered in local casinos. The bank has since then admitted lapses in internal control and revamped its senior management team.

RCBC’s return on equity eased to 6.4 percent from 9.24 percent in the previous year.

The bank reported an 11.42 percent increase in interest income from the lending business last year. Net interest income reached P15.7 billion, representing 69 percent of total gross income which amounted to P22.81 billion.

Net interest margin stood at 4.06 percent for the period.

RCBC saw an 18.8 percent growth in consumer loans and a 10.2 percent growth in small and medium enterprise lending, including microfinance. The size of the total loan book was not disclosed.

Rizal MicroBank, its microfinance arm, posted a profitable operation in 2016 with a total loan disbursement of P1 billion. This unit ended with a loan portfolio of P703 million.

Other operating income rose by P270 million to P7.07 billion, representing 31 percent of total gross income. This was attributed to higher foreign exchange and trading gains, and miscellaneous income.

Total fees and commissions reached P3.42 billion, accounting for 48 percent of other operating income.

Excluding the one-off BSP fine, the bank’s other operating expenses grew by 7.4 percent to P16.34 billion primarily due to the expansion in the branch and ATM (automated teller machine) network. Its distribution network grew by 25 branches last year to 481 while ATMs increased by 146 to 1,488 as of end-2016. This resulted in a 3.09 branch-to-ATM ratio, one of the highest in the industry.

On asset quality, consolidated non-performing loans (NPLs) stood at 0.98 percent of total loans. Consolidated NPL coverage ended at 93.78 percent.

Consolidated assets ended the year at P521.46 billion while capital funds amounted to P62.63 billion. Total capital adequacy ratio was at 16.16 percent of risk assets while core tier 1 capital ratio ended at 12.89 percent, both above regulatory requirements.

Despite the money laundering controversy last year, RCBC generated P10.72 billion more deposits last year to end with total deposits of P353.07 billion, of which 58.06 percent consisted of low-cost deposits.

Under its wealth management group, total assets under management (AUM) expanded by 12.2 percent to P91.6 billion. For 2017, this unit expects to breach the P100-billion AUM level.