Thursday, 5 November 2009

Aboitiz, RCBC defy economic slowdown

Jenniffer B. Austria and Eileen A. Mencias
Manila Standard

ABOITIZ Equity Ventures Inc. and Rizal Commercial Banking Corp. booked higher earnings in the first nine months despite the worldwide economic slowdown that started late last year.

Cebu-based Aboitiz Equity Ventures said its net income rose 74 percent to P5.9 billion during the period, with its power unit contributing 54 percent to group profit followed by the banking group (26 percent), the food group (14 percent), and the transport group (6 percent).

The group also booked a non-recurring gain of P543 million from the termination of the planned sale of Aboitiz Transport System to KGLI-NM Holdings Inc.

“It is very assuring to know that all our businesses are not only profitable and performing well, but have strong cash flows and healthy balance sheets that are important to sustain their growth,” group president Erramon Aboitiz told the Stock Exchange.

He said Aboitiz Power Corp. contributed P2.9 billion to group income, Aboitiz Power P2.3 billion, and Aboitiz Equity P1.4 billion.

Union Bank of the Philippines handed over P1.3 billion, and City Savings Bank P56 million, Aboitiz said.

The Yuchengco Group-controlled Rizal Commercial Banking Corp. said its net income rose 47 percent to P2.82 billion from P1.92 billion, and it rose despite a P739-million increase in provisioning for losses.

The bank’s operating income increased by P1.93 billion to P12.11 billion, with net interest income growing by 19.4 percent and non-interest income by 18.3 percent.

Most banks reported a fall in non-interest income—gains from trading, foreign exchange and asset sales—last year, but many have been reporting a turnaround from that income source this year.

RCBC said its non-interest income soared to P4.56 billion from P3.85 billion a year ago, boosted by the sale of an office building.

“RCBC adopted strategies meant to prepare itself for a volatile economic environment in 2009,” chief executive Lorenzo Tan said.

“The bank raised an additional P4.2 billion in tier 2 capital, sustained an aggressive low-cost deposit campaign, exercised prudence in its loan approvals, and achieved exceptional trading gains by riding the market’s volatility successfully.”

The bank opened 14 new branches this year, bringing its total to 335, and installed 86 more automatic teller machines to bring the total to 469.

The bank’s capital-to-risk ratio improved to 19.26 percent from 17.3 percent. And its higher tier 2 capital put it well above the 10 percent required of banks.

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