Higher lending, foreign exchange gains boost RCBC profits

Yuchengco-led Rizal Commercial Banking Corp. (RCBC) said earnings grew by double-digits during the first six months this year, driven by higher lending and foreign exchange gains. Income rose to P1.69 billion, 10.46 percent higher than last year’s P1.53 billion as interest income surged by 22 percent, the lender said in a disclosure to the Philippine Stock Exchange (PSE). However, the Philippines’ seventh-largest lender failed to disclose its second quarter results. Core net income jumped 72 percent this year, even besting last year’s financial results which included one-time gains amounting to P547 million after it sold its Makati building along with other non-recurring income. “Aligned with the prudent growth strategy, the bank continued to focus on the basics: building its core business, it expanded market reach, and improved customer service quality," RCBC said. “The bank is currently in the process of building a new core banking system that will provide better product and service offerings at a faster pace to its customers." Interest income from loans went up by almost a quarter due to higher volumes and better yields. As financial markets recovered, the bank's other income increased by 23 percent to P2.7 billion while income from foreign exchange rose 29 percent to P302 million. Building its financial strength through prudent balance sheet management, RCBC said total consolidated resources inched up to P258 billion "as a result of its intentional drive to reduce higher cost deposits and to improve yields." The bank reduced its bad loan ratio to 2.77 percent of its total portfolio from 4.11 percent last year. Loans reached P150 billion. The move reflected RCBC’s “continuing efforts to improve asset quality even as it tightened credit standards during the economic slowdown to protect against higher credit risk," it said. The bank’s low cost CASA (current account and savings account) deposits increased by P10.6 billion or 13 percent from June last year," it added. The bank’s capital adequacy ratio (CAR), or the ability to shoulder risks, stood strongly at 19.35 percent as of June this year after it raised an additional P4 billion lower Tier 1 capital in May. Its CAR level is above the 10 percent minimum regulatory requirement. As of end-June 2009, the bank’s had 332 branches, more than end-2008’s 324 outlets. Its consolidated ATM network has also grown to 452 machines from 380 as of end-2008. RCBC shares closed unchanged at P16.25. - GMANews.TV