RCBC eyes double-digit profit growth

Over a year after the Bangladeshi cyberheist, Yuchengco-led Rizal Commercial Banking Corp. (RCBC) feels it has moved on from the money laundering scandal and is now looking forward to a double-digit growth in profit in 2018.

“The numbers would show that after that incident, the bank is making money, doing well and we just have to make sure that we would do better,” RCBC president Gil Buenaventura told reporters on Tuesday night.

By next year, RCBC expects to grow its net profit by 10-12 percent from this year’s level. In the first nine months of this year, net profit stood at P3.4 billion versus P3.5 billion a year ago.
“We’re right on track, close to our budget,” he said.
Earnings next year will come mostly from core lending activities. “With the rising interest rates, there will be less opportunities for trading gains, so more income will be coming from regular loans. But there will be small window of opportunities for trading gains,” he said.

The bank has grown its loan book by 17 percent so far this year versus the average industry growth of 20-21 percent. Loan growth next year is seen to slightly ease to 15 percent as the bank focuses on smaller-ticket but higher-margin loans.

“The thrust next year will be less of the big corporations, more of the SMEs (small and medium enterprises) and consumer [loans], so these are smaller loans,” Buenaventura said.

To date, corporate lending accounts for about 60 percent of RCBC’s portfolio while the remaining 40 percent represents the combined SME and consumer loans.

In early 2016, some $81 million stolen by unidentified hackers from the Bangaladesh central bank slipped through the Jupiter St. Makati branch of RCBC—later on tagged by the bank as a “rouge” branch—and disappeared in the casinos. RCBC was thus thrust into the global spotlight for the involvement of its officials and was eventually slapped with a P1-billion fine by the Bangko Sentral ng Pilipinas.

The penalty had been settled by RCBC, which has likewise implemented reforms in its internal controls and procedures.

One major change was the separation of the sales and operations at the branch level, as they were previously unified. Separating sales from operations ensures greater check and balance, Buenaventura said.

“We updated all our processes and procedures and enhanced training programs to make sure that everybody knows exactly what they want to do, to make sure they follow the policy book,” he said.
RCBC has likewise tightened the screening of branch managers. “We do more background checking, strictly enforce cross-posting, move them around and impose mandatory leaves. That’s when all the issues arise —when they are on mandatory leave,” he said.

Branch managers are now tasked to lead branches for no more than 24 months, after which, they will be moved to other branches.