RCBC earnings dip during first half of 2014

Yuchengco-led Rizal Commercial Banking Corp. posted a six-month net profit of P2.02 billion, 36 percent lower year-on-year in line with industry-wide slowdown in trading gains.

In a press statement, RCBC said that “consistent with the strategy of focusing on sustainable and less cyclical sources of income,” it gained momentum in growing its core businesses with net interest income reaching P7.58 billion, 23 percent higher year-on-year.

Excluding trading gains, gross revenues increased by 8 percent year-on-year to P9.85 billion in the first semester.

“Once again, RCBC has shown solid fundamentals and sustainable business models. Deposits and loans continue to be in an uptrend, asset quality is in check, operating expenses are moderated, and net interest margin at 4.31 percent remains one of the highest in the industry,” said RCBC president Lorenzo Tan.

Tan noted that the bank had grown its net interest income as a ratio of operating expenditure to 110 percent in the first semester, up from last year’s 92 percent and from 84 percent in 2012.

“Not only have we shown resiliency during times of financial market volatility but execution and synergy in our business strategies,” Tan said.

RCBC expanded its loan book by 18.4 percent year-on-year to P235.9 billion in the first six months.

Meanwhile, microfinance lending unit Rizal Microbank increased its outstanding loan portfolio by 88 percent.

Despite the steady loan growth, RCBC said its asset quality was well-managed with the parent bank’s non-performing loan (NPL) ratio at 0.5 percent, while consolidated NPL ratio stood at 1.18 percent. The parent bank’s reserve cover also stood strong at 126.16 percent.

Total fee-based and miscellaneous income reached P2.1 billion, accounting for 20 percent of the bank’s gross income.