Lower trading gains drag RCBC profit down

Yuchengco-led Rizal Commercial Banking Corp. (RCBC) posted a nine-month net profit of P3.2 billion, down by 5.9 percent year-on-year due to a decline in trading gains.

Excluding nonrecurring items, particularly trading gains, RCBC’s core income grew by 42 percent in the first nine months, the bank disclosed to the Philippine Stock Exchange on Friday.

RCBC reported a stronger core business, driven by a double-digit growth in net interest income which rose by 12 percent and fee-based income which grew by 15 percent.

The bank’s combined net interest income and fee-based income now accounted for 91 percent of gross income.

RCBC’s net interest income reached P14.7 billion in the first nine months, up 12 percent year-on-year.

The bank grew its loan book by 12 percent to P379 billion as all market segments sustained growth. Average loan volume of the corporate segment grew by 9 percent while the small and medium enterprise (SME) and consumer segment expanded by 32 percent and 33 percent, respectively.

“Steadily, RCBC has sustained its core business, posting healthy growth in core income despite macro challenges. We are focused on the SME market as part of our strategy to diversify our loan portfolio. We are very proud of the recognition given to us as the Best Bank for SME by AsiaMoney,” RCBC president Gil Buenaventura said.

Within the consumer segment, credit card receivables rose by 33 percent.

Rizal MicroBank, the microfinance arm of the bank, increased its average loan portfolio by 20 percent year on year.

In terms of asset quality, consolidated nonperforming loans stood at 1.22 percent of total loans, up from 1.41 percent a year ago.
For every P1 of bad loan, the bank has provided buffer worth 96.94 centavos at the consolidated level. At the parent bank level, coverage stood at P1.42 for every peso of bad loan.

Total operating expenses hit P14.4 billion in the first nine months, up 10.8 percent year-on-year. This was attributed to continued expansion in branch and distribution network as well as higher documentary stamp taxes. —DORIS DUMLAO-ABADILLA