Cut risk, protect profits: RCBC CEO Cariaso’s game plan for a tougher economy

Yuchengco-led Rizal Commercial Banking Corp. is aggressively de-risking its balance sheet as it prepares for a prolonged period of elevated interest rates and mounting global economic uncertainty.

The bank has shortened the average duration of its investment securities portfolio to 3.5 years as of the first quarter of 2026, from 7.3 years in 2021, creating a structural buffer against potential losses if interest rates remain higher for longer or rise further, CEO Reggie Cariaso said during the bank’s annual stockholders’ meeting.

“We are navigating a complex and shifting macroeconomic landscape,” Cariaso said. “However, we have been building up our defenses, locking in strategic wins, and fundamentally reshaping our balance sheet to drive sustainable, high-quality growth.”

RCBC is also bracing for a more challenging credit environment as persistent inflation keeps borrowing costs elevated and increases pressure on borrowers.

As part of that strategy, the bank has tightened credit risk management by reducing credit lines to higher-risk segments and launching an analytics-driven early intervention program for auto and housing loans to engage stressed retail borrowers before they default.

The measures come as RCBC continues to manage pockets of weakness in its loan portfolio. Its consolidated gross non-performing loan (NPL) ratio stood at 4.8%.

While its larger corporate lending portfolio maintained a healthier NPL ratio of 2.7%, Cariaso acknowledged near-term pressure on the bank’s SME portfolio, which is undergoing an operational overhaul to reduce bad loans.

RCBC has also moved early to protect its funding costs and net interest margin by securing lower-cost financing before borrowing costs climbed.

The bank tapped debt markets through three major issuances: a $350 million offshore sustainability note at 5.375% in January 2025, a P12.21 billion ASEAN sustainability bond in July 2025, and a P20.5 billion bond priced at 6.08% in April 2026.

“My objective remains the same—to protect, scale, and elevate the strong franchise that is RCBC,” Cariaso said.—Bilyonaryo.com

Published by: Bilyonaryo

https://bilyonaryo.com/cut-risk-protect-profits-rcbc-ceo-cariasos-game-plan-for-a-tougher-economy/