RCBC posts P2-B net earnings in 2006, up by 23%

 

 

Rizal Commercial Banking Corporation (RCBC), the fifth largest private universal bank in the Philippines, sustained its revenue growth in 2006, posting a 23 percent hike in net income, as it further strengthened its balance sheet. The bank recorded an unaudited net income of P2.011 billion against P1.63 billion in 2005. The growth could be attributed to the bank’s intensified efforts at generating more income from its core lending business and a larger securities portfolio. The robust performance is also highlighted by a 23 percent increase in asset base to P227.3 billion last year compared to P185 billion in 2005. This was buoyed by the growth in financial market assets, as it grew by 44 percent to P61.0 billion, strengthening the bank’s liquidity position. Growth is further complemented by a healthy increase in total deposits to P157.4 billion or 18 percent up from P133.2 billion in the previous year. The new RCBC CEO, Lorenzo V. Tan, credited the management team led by former CEO Rizalino S. Navarro, Corporate Vice Chairman Cesar E. A. Virata and President Francisco S. Magsajo for the bank’s growth. "RCBC’s continued performance excellence is buoyed by their aggressive and concerted efforts to increase the bank’s competitiveness and standing in the industry," he said. Navarro, who recently retired but continues to serve among the RCBC board of directors, said that "the bank has exceeded its targets and we’re optimistic that we will continue to outperform under our new management." RCBC’s aggressive capital buildup towards the last quarter of 2006, with its issuance of $ 100 million hybrid tier 1 securities and P1-billion worth of perpetual but non-cumulative preferred shares, boosted the bank’s capital accounts to P24.5 billion or 85 percent higher than P13.2 billion in 2005. The capital-raising activities have increased RCBC’s capital adequacy ratio (CAR) to over 20 percent from 14 percent in 2005, well above the 10 percent regulatory minimum. RCBC also plans to further pursue its strategic capital buildup by issuing 250 million shares of new common stock through an additional public offering in early 2007. Apart from building its capital base, the bank managed to significantly reduce its non-performing loans and real and other properties acquired (ROPA) through the Special Purpose Vehicle Law and private sales/public auctions of more than P5 billion last year, consistent with the bank’s strategic focus on asset quality. As of end 2006, RCBC had a total of 289 branches, 5 extension offices, and 258 ATM facilities. The bank has plans of further expanding its ATM network and opening new branches in 2007.

 

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