Rizal Commercial Banking Corp., one of the country’s largest banks and a member of the Yuchengco Group of Companies, said Tuesday unaudited consolidated net income declined 11 percent in the first three quarters to P4 billion from P4.5 billion a year ago, as it increased provisions for possible loan losses because of the impact of the COVID-19 pandemic.
RCBC said in a statement it allocated P7.2 billion in provisions for loan losses as a conservative stance to proactively manage the higher risks brought about by the health crisis.
“While the bank remains at a relatively healthy position, we have yet to see the full impact of this pandemic. We continue to strengthen our balance sheet in order to soften further impact in the coming months,” RCBC president and chief executive Eugene Acevedo said.
“Our digital capabilities have gained traction and we will focus on onboarding more clients with our digital platforms,” Acevedo said.
The bank’s gross income grew 6 percent year on year to P29.4 billion. Net interest income rose by 20 percent year-on-year to P19.7 billion, given lower funding costs and better margins.
Its diversified customer loan portfolio expanded by 10 percent to P452.2 billion, led by the small and medium enterprises and consumer loan segments which registered year-on-year growth of 16 percent and 8 percent, respectively.
The credit card business also grew, with credit card receivables accelerating by 21 percent, to a card base of over 900,000 reflecting an 8 percent year-on-year growth. Annualized return on equity stood at 6.2 percent and annualized return on assets at 0.7 percent.
Acevedo said the bank remained focused on the changing needs of its customers. RCBC’s digital transformation is centered on achieving a high level of customer experience, process efficiency and productivity.
He said cost-to-income ratio improved to 55.8 percent as of end-September from 58.7 percent last year. Operating expenses of P16.4 billion was slightly higher by 0.6 percent despite the additional COVID-related expenses.
Productivity increased as a result of several business process reengineering and rationalization efforts, with loans and deposits per branch ratio improving by 25 percent, it said.
RCBC maintains a P731-billion balance sheet with 69 percent in loans and receivables and 9 percent in investment securities.