RCBC earnings drop 30% in Q1

Published May 14, 2021, 3:51 PM

by James A. Loyola

Rizal Commercial Banking Corporation reported a 30 percent drop in unaudited consolidated net income to P1.6 billion for the first quarter of 2021 from the P2.3 billion earned in the same period last year.

In a disclosure to the Philippine Stock Exchange, the bank said it sustained core business growth and higher earning asset base.

Excluding trading and foreign income, gross income and pre-provision profit increased by 10 percent and 70 percent, respectively.

For the first quarter, net interest income reached P6.5 billion, up by 2 percent year on year as the Bank continued to build the asset portfolio, supported by lower funding costs.

Loan growth was steady at 6 percent, while investment securities increased by 19 percent. Fee income likewise grew by 48 percent, as fees from investments and retail transactions surged in the first quarter.

There has been a significant improvement in overall credit and payment activity and more customers are accessing the Bank’s retail and corporate online payment channels.

The bank kept a tight watch on operating expenses resulting in just a 2 percent increase year on year. The expenses on investments and transactions related to business growth offset the savings from digital efforts and channel rationalization.

RCBC booked P936 million of provisions for impairment losses in the first quarter of 2021 to address the downward pressure on credit quality due to the pandemic.

This was 42 percent lower year on year following the significant build-up of reserves in 2020 in anticipation of the uptick in loan defaults.

The bank continued to enhance its credit risk management through centralized portfolio monitoring and credit analytics.

The bank’s gross loan portfolio expanded by 7 percent year on year to P481.7 billion. This was fuelled by the growth in the corporate and small and medium enterprise (SME) segments by 8 percent and 10 percent, respectively.

RCBC continued to support the recovery and growth plans of its clients, especially those in essential sectors. Despite the quarantine restrictions, the Bank strove to find innovative ways to actively engage clients and offer them a wide array of banking and financing solutions.

Through its COVID Assistance and Recovery (CARE) Program, RCBC also continued to provide refinancing support to customers that are severely impacted by the pandemic.

“The pandemic may have challenged us in so many ways, but it has only reaffirmed our commitment to push forward with our digital acceleration in order to provide the best customer experience,” RCBC President and CEO Eugene S. Acevedo said.

He added that, “We will continue our prudent approach to fortify our balance sheet, roll out programs and initiatives that will support our clients, and remain agile as an organization.”