Rizal Commercial Banking Corp., the ninth-largest lender in terms of assets, said Wednesday unaudited consolidated net income grew 17 percent in the first half to P3.1 billion from a year ago, even after allocating P5.2 billion in provisions for higher risks related to the post-lockdown environment.
“It has been a difficult first half of the year, and we remain mindful of the challenges ahead. Hence, we’ve taken prudent steps to cushion the impact of this pandemic and at the same time, to continue serving our fellow Filipinos better by strengthening our digital capabilities, customer relief programs, and partnership with the government and other financial institutions,” RCBC president and chief executive Eugene Acevedo said in a statement.
He said the bank was taking on substantial provisions in the first half, representing 3.5 times more than the provisions set aside last year.
He said the growth in net income was primarily driven by the 25-percent increase in gross revenues to P20.9 billion as net interest income and non-interest income grew by 20 percent and 32 percent, respectively.
Core business continued its growth momentum complemented by the 49-basis point improvement in net interest margin to 4.3 percent.
Favorable market opportunities resulted in P5.7 billion in trading gains in the first half, allowing the bank to take a conservative approach and book higher provisions to proactively manage the headwinds that the entire industry is anticipating.
Acevedo said RCBC recognized its crucial role as it joined efforts with the whole country in jumpstarting the economy. The bank focused on the changing needs of its customers by continuously investing in digital technology and reengineering initiatives to achieve a high level of efficiency and productivity.
Operating efficiency as of June improved with a cost-to-income ratio of 52.8 percent, better than the 62.7 percent registered last year. The annualized return on equity went up to 7.4 percent while the annualized return on assets improved to 0.9 percent.
The bank’s P718.8 billion balance sheet was supported by an P84.4 billion capital base as of June 2020, with solid capital ratios—CAR of 13.9 percent and CET1 ratio of 13.0 percent.
Deposits increased by 19 percent to P499.4 billion, with a CASA ratio of 53 percent. The bank's funding portfolio was strengthened by the issuance of 2-year peso fixed-rate bond offering in April and July 2020.