Rizal Commercial Banking Corp. said Tuesday net income declined 7.4 percent in 2020 to P5 billion from P5.4 billion in 2019 as it boosted impairment losses to P9.3 billion amid the COVID-19 pandemic.
RCBC said in a statement impairment losses increased 2.5 times than in 2019, normalized for extra-ordinary items, to manage the higher risks due to the pandemic and economic slowdown.
RCBC said core business remained strong with gross income reaching P37.9 billion, up 6 percent from 2019. Net interest income rose 18 percent year-on-year to P26.3 billion, given the lower funding costs and higher margins.
The bank’s diversified loan portfolio rose 5 percent to P456.6 billion, led by the small and medium enterprises and consumer loan segments which registered year-on-year growth of 8 percent and 5 percent, respectively.
RCBC president and chief executive Eugene Acevedo said the pandemic drastically changed customer behavior.
“But we are thrilled with how we can continuously provide the best banking experience to our customers and fellow Filipinos through innovative digital solutions. We are also happy that our efforts toward digital acceleration and financial inclusion have been recognized by the industry,” he said.
RCBC said its credit card business grew by 3 percent in terms of credit card receivables. The bank’s net non-performing loan ratio as of end-2020 stood at 2.9 percent.
The bank said that in response to the pandemic, it mobilized resources to ensure workplace safety and business continuity as employees were equipped to work from home.
Meanwhile, several business process reengineering and rationalization efforts led to higher efficiency and productivity, with loans and deposits per branch ratio improving by 24 percent and 33 percent, respectively, it said.
The banks said operating expenses of P22.1 billion was marginally higher by 1.4 percent. Cost-to-income ratio stood at 58.3 percent as of December 2020, better than the 60.8 percent recorded last year.
RCBC said it continued to strengthen its P770.8 billion balance sheet with 64 percent in loans and receivables and 11 percent in investment securities. This was supported by a P101.5-billion capital base as of December 2020, with solid capital ratios—capital adequacy ratio of 16.1 percent and common equity tier 1 ratio of 12.6 percent.
Its capital base was strengthened by the issuance of $300 million in additional tier 1 capital notes last August 2020.
Total deposits rose to P535.8 billion, driven by the 21-percent growth in current and savings account deposits. Return on equity stood at 5.6 percent and return on assets at 0.7 percent.
RCBC currently has a consolidated network of 447 branches and 1,426 automated teller machines strategically located nationwide, resulting in a 3.2 branch-to-ATM ratio.