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RCBC 1ST HALF NET INCOME AT P 2.23 BILLION

RCBC posted P2.23 Billion in Net Income for the 1st Half of 2011, higher by 5.4% vs. P 2.11 Billion in the same period last year. Contributing to the growth in net income was net interest income of P 5.37 Billion and Other Operating Income of P 3.94 Billion.

Other Operating Income grew by 23.8%, an increase of P 758 Million over 1st Half 2010. The growth in Other Operating Income was accounted for by service fees &commissions higher by 12.6%, trust fees growing by 12.8%, trading & foreign exchange gains up by 54%. Net Interest Margin of 4.2% is among the highest in the industry.

The bank continued to build its financial strength following a deliberate strategy of prudent balance sheet management. Total consolidated resources reached P 301.08 Billion, 6.38% higher than the P 283.02 Billion posted in the same period last year. Loans grew to P 162.92 Billion as the corporate book rose by 10% and the SME loan book by 8%. Parent Bank Loans & Investments grew by 12.8% year-on-year.

The Bank's Non-performing loans (NPL) ratio dropped to 2.36% from the previous year's 4.73%. NPL Cover of the parent bank rose to 101%.

Capital Funds grew by 19.7% to P 37.61 Billion from P 31.42 Billion last year. Recently IFC invested P 2.1 Billion while CVC (one of the biggest private equity funds in the world) signed an agreement to purchase P 5.0 Billion worth of RCBC shares inclusive P 3.7 Billion in new capital. Both placements are at P 29 per share. The investments by these sophisticated investors are a good testimonial for the Bank in terms of its consistent performance, world-class management team, majority shareholder, and the exciting prospects of the Bank.

Total Deposits as of end-June 2011 totaled P 213.31 Billion as the bank continued to focus on growing its low cost CA/SA deposits which grew by 13.31% while prudently reducing higher costing time deposits. CA/SA to Total Deposits ratio improved to 59.7% in the 1st Half of 2011 compared to 53.8% in the same period last year. Operating Expenses totalled P 5.8 Billion as the bank continued to expand its branch and ATM network in order to increase reach and improve customer convenience. Parent bank Cost to Income Ratio for the period was at 58%. As of the end of June 2011, the bank's branch network, including the 10 branches of J.P. Laurel Bank and 2 branches of Rizal Microbank, reached 373 from 344 in 2010. The bank now has 652 ATMs compared to 523 in June 2010.

The expansion of its distribution channels through increasing the number of its branch and ATM networks, the addition of more features to its electronic banking facilities and the recent partnership with Mercury Drug which launched the RCBC MyWallet Mercury Drug Card, all contributed to the double digit growth in CA/SA deposits.

Annualized Return on Equity was at 13.45% and Annualized Return on Assets of was at a healthy 1.46%. Capital Adequacy Ratio (CAR) stood strong at 18.87% as of June 2011, with much leeway for asset growth from the minimum regulatory requirement of 10%, Tier 1 ratio of 13.74% also exceeded the BSP’s 6% requirement.

Reflective of RCBC's commitment to excellence, the Bank received the "Philippine Retail Bank of the Year award" in the recently concluded Asian Banking & Finance Awards in Singapore and was cited as "The Best Commercial Bank in the Philippines" by London based publication World Finance Magazine. RCBC also received seven (7) awards from Asiamoney which included among others "Best Domestic Provider for Interest Rates – Philippines", "Best Domestic Provider for Credit – Philippines", and "Overall Best for Interest Rates".

RCBC's thrust to improve transaction efficiency, and productivity will be supported by a new core banking platform completely operational by 2012. This is also expected to support innovation in product development.

RCBC is a member of the multi-industry conglomerate Yuchengco Group of Companies. It is a strong player in the remittance business with a wide presence overseas through remittance subsidiaries and tie-ups in North America, Europe and Hongkong.