Rizal Commercial Banking Corporation

RCBC booked income of P2.2-billion in first half of ‘18

Rizal Commercial Banking Corp., the 10-largest lender in terms of assets, said net unaudited consolidated income in the first half fell 6 percent to P2.2 billion from P2.35 billion a year ago on lower trading gains.

The bank said in a statement Friday excluding non-recurring income (trading gains), core income grew 47 percent from a year ago, reflecting the robust growth in earnings from core businesses.

Net interest income rose 12 percent to P9.7 billion year-on-year. Even with the intense pricing competition, the bank still achieved an annualized net interest margin of 3.98 percent, which remains one of the highest in the sector.

The bank’s lending business is vibrant with net loans and receivables expanding by 14 percent to P372 billion. All market segments sustained their solid growth with 11-percent growth in corporate loans, 36-percent increase in SME Loans, 17-percent rise in consumer loans and 33-percent expansion in credit card receivables.

“The bank’s trajectory is on an uptrend. We’re above target for the first half of 2018. With the new P15 billion capital raised in July, we will remain focused on growing our lending business especially the consumer and SME and micro-finance business throughout the Philippines,” RCBC president and chief executive officers, Gil Buenaventura said in a statement.

Rizal MicroBank, the micro-finance unit of the bank that provides financing requirements for micro and small enterprises, increased its outstanding loan portfolio by 27 percent year on year.

RCBC Bankard has a strong and active card base of 625,000 in the first half of 2018, up 16 percent from a year ago.

Despite the sustained growth momentum in loans, asset quality remained well-managed with consolidated NPL ratios of 1.18 percent, better than 1.35 percent in the same period last year. NPL coverage improved to 100 percent from the previous year’s 80 percent at the consolidated level, and a healthier 151 percent at the parent bank level.

source: http://manilastandard.net/business/corpo...of-18.html
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...news lang

RCBC to absorb thrift unit into commercial bank

THE Rizal Commercial Banking Corp. (RCBC) will absorb the operations of its thrift bank subsidiary to reduce operating costs and consolidate capital, providing the lender with a bigger retail base.

In a disclosure yesterday, the bank said it will merge the operations of RCBC Savings Bank (RSB) with the parent commercial bank.

The board of directors of RCBC Savings approved the proposal on Monday, but it remains subject to regulatory approval.

The merger plan also needs to be approved by bank shareholders, as well as by the Bangko Sentral ng Pilipinas (BSP), the Securities and Exchange Commission and the Bureau of Internal Revenue.

The Yuchengco-controlled bank told the Philippine Stock Exchange that the merger plan would allow for “more efficient capital deployment” and “operational cost efficiencies.”

In particular, RCBC said consolidating the two entities would mean “more efficient compliance with the Basel 3 liquidity ratios” as set by the BSP. This comes ahead of higher capital and liquidity requirements which will take effect January 2019, in line with global standards imposed on big banks.

The merger also paves the way for “optimal coordination between the branch banking networks of RCBC and RCBC Savings” as well as “medium-term improvement” in the firms’ funding economics.

The thrift bank is wholly owned by RCBC, with paid-up capital worth P3.19 billion.

Asked for comment, RCBC Savings Bank president and chief executive officer Rommel S. Latinazo said the merger is expected to boost the commercial bank’s retail network.

“With the merger, RSB’s consumer lending business will be absorbed by RCBC,” Mr. Latinazo said via text message.

Thrift banks like RSB mainly target individual borrowers and small businesses, which are deemed riskier but higher-yielding segments compared to corporate clients which commercial banks usually serve.

RCBC posted a P2.2-billion net profit in the first half, down 6.4% from a year earlier. The country’s 10th biggest bank currently runs 509 branches and 1,597 automated teller machines nationwide.

RCBC Savings is the third-biggest thrift lender with at least 154 branches and lending centers. It posted a P629.308 million net profit in the first half, according to RCBC’s income statement for the second quarter.

source: https://www.bworldonline.com/rcbc-to-abs...cial-bank/
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...good news

Korea’s KB Kookmin Bank sees PHL footprint via RCBC

RIZAL Commercial Banking Corp. (RCBC) announced on Monday its partnership with one of South Korea’s largest banks in a bid to establish connections at the dawn of regional banking integration.

The bank said in a statement it has signed a “business cooperation agreement” with KB Kookmin Bank in Seoul, South Korea, earlier this year.

The agreement aims to “provide high-quality financial services to corporate customers of both countries by adopting corporate customer tie-up program.”

The main contents of the agreement include “mutual cooperation for maintaining and increasing Korean corporate customer base,” “joint marketing for corporate customers of direct remittance service” and “sharing know-how to improve service quality for corporate customers” and others, the statement read.

Kookmin Bank was founded in 1963 and is one of the leading commercial banks in Korea in terms of total assets.  The Korean bank has 23 global networks in 10 countries, including branches in New York, Tokyo, Beijing and Hong Kong. It had no presence in the Philippines.

RCBC, meanwhile, shared its “strong and long-established relationship with Korean corporates” since it started deals with Korean garment and shoe companies in Bataan in the end of 1970s.

The local bank also had business relationship with Hana Bank in the mid-1990s. As the Korean business in the Philippines grew, RCBC established the Korean Business Relationship Office (KBRO) in 2014 and where two Koreans, Jae-hoon Oh and You-min Kim, have been working as of now.

The Asean’s vision for the financial integration seeks to achieve a well-harmonized and smoothly functional financial system by 2025, characterized by more liberalized capital account regimes and interlinked capital markets.

Part of this financial integration vision is the ABIF, or the framework agreed among the Asean member-states to facilitate the entry and operation of Qualified Asean Banks in other Asean countries to promote equal access and treatment among local banks and foreign entrants in each economy.

In a recent survey by the Bangko Sentral ng Pilipinas, local banks bared that they are looking to leverage on technology and trust in order to maintain growth and profitability, amid the impending regional banking integration.

The local industry’s top three banks’ plans to maintain their stronghold amid the integration include developing new capabilities, expanding market reach and leveraging client

source: https://businessmirror.com.ph/koreas-kb-...-via-rcbc/
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...ayos meron na rin siyang digital currency Tongue

RCBC sees rollout of digital currency ePiso by next year

RIZAL COMMERCIAL Banking Corp. (RCBC) expects its digital currency to be fully rolled out next year, with the lender still testing the network across various communities.

In a recent interview, RCBC Group Head of Digital Banking Margarita B. Lopez said the Yuchengco-led bank is still pilot-testing its ePiso digital currency as it continues to study the value proposition of the network, on-boarding various partners such as merchants and suppliers.

“I expect the first six months [of the program] would be an intensive checking whether the business that we think is the path to building an ecosystem will actually work,” Ms. Lopez told BusinessWorld. “If it does, then that’s what we’ll replicate. That’s continuous learning for us.”

She added that the full deployment of ePiso should commence by next year.

“By next year, dapat full implementation na tayo (it should be in full implementation).”

Dubbed as the first of its kind in the Philippines, ePiso was first tested in May as a digital currency stored in a mobile wallet.

Currently, the ePiso is being tested in a community in Muntinlupa as well as in Bulacan and Bukidnon.

During the first few months of the pilot test, Ms. Lopez said the bank saw a 330% growth in terms of mobile application downloads and a 2000% increase in volume transactions.

“The [numbers are] very encouraging… There’s really a way for us to help them secure their hard-earned money,” she said.

Ms. Lopez added that RCBC is looking at partnering with more businesses, which include suppliers, buyers, and merchants to grow the ecosystem.

“Right now, we’ve on-boarded suppliers for farmers. We’ve also on-boarded a fast-moving goods company to [supply] the daily needs of ePiso users.”

Aside from the pilot areas, RCBC plans to test the digital currency ecosystem in certain areas in Mindanao, Visayas, and Palawan, depending on vicinities being serviced by its partners.

It is also looking at adding more use cases for the digital currency such as RCBC’s banking products and services, on top of fund transfers, merchants, as well as utility bills payments already being tested.

“Hopefully at some point, we’ll be working with different partners — either other banks or [financial technology] companies that will be able to offer investments, savings and so forth,” Ms. Lopez said. “Whatever that would benefit the consumers.”

For now, she noted that RCBC is closely working with the Bangko Sentral ng Pilipinas (BSP) through a sandbox model.

“Technically, the central bank should be the one to issue [digital currencies]. Right now, we’re doing the issuance and conversion for them, but at some point, they will issue that.”

The central bank launched the National Retail Payment System framework in 2015 with the objective of promoting a “cash-lite” economy wherein financial transactions will veer away from cash and check and toward electronic fund transfers and digital wallets.

The BSP targets to raise the share of digital payments to 20% of the total transactions by 2020 from a measly one percent in 2013.

RCBC posted a P2.2-billion net income in the first half of the year, 6.4% lower than the P2.35 billion tallied a year ago due to lower trading gains.

source: https://www.bworldonline.com/rcbc-sees-r...next-year/
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...RCBC MBT BPI BDO takes a hit 

Stocks fall as banks take hit from Hanjin default

SHARES fell on the last trading day of the week as investors turned cautious on the banking sector after news of Korean firm Hanjin’s $412-million loan default from five of the country’s largest banks.

The 30-company Philippine Stock Exchange index (PSEi) fell 1.01% or 81.14 points to close at 7,904.09 on Friday. The broader all shares-index also slumped 0.72% or 34.76 points to end the week at 4,730.15.

“The index dropped 81.14 points today to close at 7,904.09, but even fell by as much as 129 points intraday, dragged down by the Hanjin debt issue which plagued the banking sector,” Papa Securities Corp. Sales Associate Gabriel Jose F. Perez said in an email on Friday.

Upon Hanjin Heavy Industries and Construction Philippines’s declaration of bankruptcy earlier this week, Rizal Commercial Banking Corp. (RCBC), Land Bank of the Philippines (LANDBANK), Metropolitan Bank & Trust Co. (Metrobank), Bank of the Philippine Islands (BPI), and BDO Unibank, Inc. were reported to have a $412-million dollar loan exposure to the firm.

RCBC, which was found to have the largest loan exposure at $140 million, saw its shares drop by 9.12% to P26.40 apiece.

Metrobank was the biggest loser in the list of 20 most actively traded shares for the day, losing 4.82% to P77.95 each. BPI followed with a drop of 4.76% to P90 apiece. Mr. Perez noted that the stocks posted the top net foreign outflows for the day at P406 million and P100 million, respectively. Meanwhile, shares in BDO were unchanged at P131.30 each.

Regina Capital Development Corp. Managing Director Luis A. Limlingan also attributed the market’s decline to the Hanjin issue, noting that this preventing the PSEi from rising past the 8,000 level.

“Philippine investors took money out as the index neared the 8,000 level. Some obvious headwinds preventing us from cracking well past 8,000 — financials getting hit as five of the largest PH banks are firefighting the biggest corporate default in the country’s history,” Mr. Limlingan said in a mobile message.

The industrials counter was the lone advancer on Friday, gaining 0.1% or 11.73 points to 11,486.68. The rest declined, led by financials which plunged 2.53% or 46.1 points to 1,772.32. Property dropped 1.15% or 46.12 points to 3,944.12; holding firms shed 0.59% or 47.04 points to 7,883.57; mining and oil slipped 0.53% or 47.14 points to 8,742.18; and services went down 0.18% or 2.92 points to 1,542.15.

Foreign investors maintained their net buying position, although at a much lower figure of P228.9 million compared to Thursday’s P1.5 billion.

Some 5.49 billion issues switched hands, resulting in a turnover of P8.5 billion, lower than the previous session’s P10.11 billion.

source: https://www.bworldonline.com/stocks-fall...n-default/
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Banks’ credit ratings at risk from Hanjin

HUGE LOAN EXPOSURES to troubled Hanjin Heavy Industries and Construction Philippines (HHIC-Phil) could pull down credit ratings for the five Philippine banks concerned as its problems would mean narrower profits for absorbing possible defaults, Moody’s Investors Service said in a Jan. 14 note.

The debt watcher said credit risks from the South Korean shipbuilder’s bankruptcy will drive credit costs higher, with reports pegging the amount at $412 million. Settlement of the unpaid debts was left hanging after Hanjin filed for corporate rehabilitation last week.

Moody’s analysts said this does not bode well for the ratings of Rizal Commercial Banking Corp. (RCBC), state-owned Land Bank of the Philippines (LANDBANK), Metropolitan Bank & Trust Co. (Metrobank), Bank of the Philippine Islands (BPI) and BDO Unibank, Inc. in their view.

“The exposures are credit negative for the five Philippine banks because they will need to incur additional credit charges related to HHIC-Phil, which will reduce their profit,” Moody’s analysts Simon Chen and Shirley Zeng said in a credit outlook.

Moody’s rates these lenders at “Baa2,” which is one notch above minimum investment grade. This matches the rating given to the Philippine government and allows them to raise funding from foreign investors at cheaper cost.

HHIC-Phil has maintained a shipyard at the Subic Bay Freeport Zone in Central Luzon since 2006 and had hired over 22,000 workers. Issues on worker safety have also hounded the shipbuilding firm since it started operations here.

HHIC-Phil owes $140 million to RCBC, $80 million to LANDBANK, $72 million to Metrobank and $60 million each to BDO and BPI.

“Assuming the worst-case scenario in which the banks make provisions for their bad exposures in full because of the unsecured nature of the facilities extended, we expect that credit costs as a percentage of the banks’ pre-provision income will increase to between 20 and 140 basis points (bp), from six to 26 basis points based on their September 2018 financials,” the report read.

“The biggest negative effect on profitability will be at RCBC.”

Moody’s analysts said they expect the bank’s bad loans ratio to nearly double to 4.3% of the total portfolio from 2.2% in 2017 due to its huge Hanjin exposure.

The increase in nonperforming loan ratios of the other four banks “will be smaller” at 15-50 bp, it added.

At the same time, the debt watcher said the banks involved can still weather this challenge, as they have more than enough capital buffers to keep a solid footing.

“Although bank profit will be dampened by the additional credit costs, we expect that the affected banks’ loss-absorbing buffers to remain robust,” Moody’s said, adding that “[f]or RCBC, our assumed credit losses for the worst-case scenario exceed the bank’s pre-provision income and will reduce its capital ratio by around 50 basis points.”

BSP Officer-in-Charge Deputy Governor Diwa C. Guinigundo said on Friday last week that HHIC-Phil’s outstanding debt is “negligible” compared to total industry loans. Latest central bank data showed that this represents 0.24% of total loans and 2.49% of foreign currency loans.

source: https://www.bworldonline.com/banks-credi...om-hanjin/
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