Makati—(PHStocks)—Rizal Commercial Banking Corporation (PSE: RCB) has posted an unaudited net income of PhP6.21 billion in 2012, 24% higher than 2011’s PhP5.01 billion. The bank’s Return on Equity (ROE) remained strong at 15.52% while Return on Assets stood at 1.77%.
Despite pressures on margins due to low interest rates, net interest income grew by 6.5% to PhP11.45 billion through growth in loans. Net Interest Margin continues to be one of the highest in the industry at 3.95%. Other Operating Income increased by 14% to PhP11.22 billion, with the support of the sustained growth of Trading and Foreign Exchange gains by 32.9%, Trust Fees by 17% and Service Fees and Commissions by 7.5%.
The bank consistently builds its financial strength following a strategy of prudent balance sheet management. Total deposits reached PhP249.20 billion as of end 2012 of which 57% were CA/SA deposits. The Bank continues to focus on growing its low cost CASA deposits. Total consolidated resources grew to PhP369.0 billion, PhP21.3 billion higher than the PhP347.7 billion posted in the same period last year.
Loans increased to PhP190 billion with the sustained growth in consumer loan bookings by 25%, SME loan bookings by 37%, and corporate loan bookings by 8%, as the Bank continues to grow its portfolio in less cyclical business in Consumer Banking, SME and Microfinance. The Parent Bank’s (NPL) ratio stood at 0.98%. Further improvement in the Bank’s Asset Quality is expected as the sale of its Non-Performing Assets to Philippine Asset Growth One, Inc. is being finalized. Philippine Asset Growth One, Inc. is an SPC formed by the International Finance Corp., OSK Group – Malaysia and Altus Transaction Services, Inc.
Operating expenses grew by 8.8% to PhP13.27 billion while Cost to income ratio for the period was at 58.53%. The Bank also successfully migrated in 2012 to its new scalable and nimble core banking platform that is expected to improve transaction efficiency and productivity. As part of the Bank’s ongoing strategy to deepen customer penetration in the next 5 years, RCBC’s branch network increased from 387 in 2011 to 420 in 2012. To further expand its reach and improve customer convenience, the bank aggressively increased its ATMs to 1,010 compared to 761 in 2011. As of end 2012, the bank’s customer base totaled 4.4 million.
Capital Funds was at PhP42.21 billion in 2012 while Capital Adequacy Ratio (Basel 2) was above the minimum regulatory requirement of 10% at 17.61%, Basel 2 Tier 1 ratio of 13.19% also exceeded the BSP’s 6% requirement.
In terms of Market Capitalization, RCBC grew by a compounded annual growth rate of 32% from 2006 to 2012. On a year-on-year comparison, the Bank’s Market Capitalization grew by 100% from PhP34.32 billion in 2011 to PhP68.45 billion in 2012. Market Capitalization as of end January 2013 stands at PhP77.46 billion.
In anticipation of Basel 3 requirements, the Bank plans to raise both Core Equity capital and Alternative Tier 1 capital within 2013. Subject to BSP approval, the Bank and the IFC Capitalization (Equity) Fund L.P. have agreed terms and conditions for a private placement totaling US$ 100 million.
2012 was also the first year of RCBC’s partnership with an international institution, Sunlife/Grepa, providing products with a global brand to our customers. The bank was motivated to enter this partnership by a vision of millions of its customers patronizing its global insurance products with Sunlife in addition to RCBC’s world-class core banking products. It is only at the first stages of this journey but the results have proven to be very encouraging. Bancassurance sales grew by 206% while Bancassurance fees grew by 214% in 2012.
Reflective of its commitment to the pursuit of excellence, award-giving bodies have recognized RCBC for various dimensions of its performance. The Bank was named as the Best Banking Group in the Philippines by World Finance. Through the efforts and activities of our Treasury Group, RCBC was cited as the Philippines’ Overall Best for Interest Rate, Best for Interest Rate Derivatives and Best Interest Rates Research and Market Coverage in the recent 2012 AsiaMoney Fixed Income Poll. The AsiaMoney magazine likewise cited RCBC’s Wealth Management Group as the Overall Best Private Bank in the Philippines while the Asian Banking and Finance Magazine awarded RCBC as Domestic Retail Bank of the Year for 2 consecutive years, and as Philippines’ SME Bank of the Year in 2012. The list also includes the Most Admired Board of Directors recognition given during the Asia CEO awards. These awards reinforce our confidence that we are headed in the right direction to being the Most Admired and Trusted Financial Services Group in the Philippines.