RCBC net profit grows by 18% to record high P5.01 billion

MANILA, Philippines—The Yuchengco-led Rizal Commercial Banking Corp. grew its net profit in 2011 by 18 percent to a record-high P5.01 billion on higher trading gains and fee-based earnings.

In a press statement, RCBC noted that non-interest income expanded by 15 percent mainly supported by trading gains, service fees, commissions and trust fees, which totaled P7.11 billion or 74 percent of total non-interest earnings.

On the other hand, net interest income amounted to P10.75 billion, 1 percent lower compared to the P10.88-billion level in 2010.

The bank’s loan book ended the year at P184.67 billion, up by about 12.6 percent from the reported figure in the previous year. For 2011, the corporate loan book rose by 30 percent while lending to small and medium enterprises and consumers expanded by 37 percent and 15 percent, respectively. The bank maintained a comfortable net interest margin of 4.09 percent.

“The bank continued to build its financial strength following a deliberate strategy of prudent balance sheet management,” the bank said in a statement.

Total consolidated resources reached P345.77 billion, 8.06 percent higher than the level a year ago.  About P255.46 billion of its resources was funded by deposits, whose low-cost component went up by 20 percent.

RCBC’s capital base grew by 25 percent to P40.55 billion on the back of higher earnings and the P5.8-billion Tier 1 equity investments by the International Finance Corporation and CVC Capital Partners, one of the top five largest private equity firms in the world. Capital adequacy ratio stood strong at 19.31 percent versus the minimum regulatory requirement of 10 percent.

In terms of asset quality, the bank’s non-performing loans dropped to 1.47 percent as a ratio of total loans from the previous year’s 3.10 percent. Provisioning coverage on these soured loans amounted to 103.4 percent.