Friday, 31 July 2009

RCBC’s first-half profit rises 11% to P1.691B

Erik de la Cruz
Business Mirror
http://www.businessmirror.com.ph/home/banking-a-finance/13913-rcbcs-first-half-profit-rises-11-to-p1691b.html

THE Yuchengco-owned Rizal Commercial Banking Corp. (RCBC) on Thursday said its first-half net income was 11 percent higher at P1.691 billion compared with P1.528 billion last year, reflecting strong gains from both lending and trading businesses.

Excluding the impact of last year’s nonrecurring income on the comparative earnings, the country’s seventh-largest bank by assets said its core net income jumped 72 percent.

The year-ago figure included one-time profits of P547 million from the disposal of acquired assets and other nonrecurring items.

The bank’s second-quarter results were not immediately available.

Net-interest income for the first six months of the year grew 22 percent to P889 million.

“The lending business sustained its strong performance as interest income from loans registered a growth of 24 percent resulting from increased volumes and better yields,” the bank said in a statement.

Other income grew by 23 percent to P2.7 billion

The bank said it had taken advantage of opportunities from the improvement in the financial markets, which resulted in a 23-percent increase in other income to P2.7 billion.

Its foreign-exchange trading delivered a 29-percent increase in income to P302 million.

Its total resources grew a modest 1 percent to P258 billion by end-June, driven by the increase in loans to all market segments. Corporate loans rose 35 percent, loans to small and medium enterprises increased by 29 percent, while consumer loans were up by 7 percent.

“The bank achieved modest growth in resources as a result of its intentional drive to reduce higher cost deposits and to improve yields,” it said. Low-cost deposits increased by P10.6 billion or 13 percent.

The disposal of nonperforming assets reduced the bank’s bad loans ratio to 2.77 percent as of end-June from 4.11 percent a year ago.

“This reflects the bank’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 also improved its capital adequacy ratio—a measure of capital against the bank’s risk-weighted credit exposures—to 19.35 percent as of end-June against the minimum regulatory requirement of 10 percent. It raised P4 billion in Tier 2, or supplementary capital, by selling unsecured subordinated notes in May.

After taking over a couple of banking institutions in recent months, RCBC remains on the lookout for acquisition opportunities.

It aims to expand its branch network to at least 400 from 332 as of end-June.

It is looking to make its presence felt more in Metro Manila through additional branches and acquire rural banks to further expand it microfinancing business.

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