MANILA – The Rizal Commercial Banking Corporation (RCBC) has allocated bulk of its PHP5.2-billion provisioning for 2020 in the first six months of the year to address any impact of the global pandemic on the bank’s operations.
“We frontloaded (the) majority of what we think we will be booking. It has affected our bottomline of course. It has reduced it significantly but we think it’s the prudent thing to do given the risks. But still, we were able to make a PHP3.1 billion, 17 percent increase, so we’re balancing it properly,” RCBC Senior Vice President and Corporate Information Officer Cristina Alvarez said in a virtual briefing Wednesday.
In a report to the Philippine Stock Exchange (PSE) Wednesday, RCBC said unaudited consolidated net income increased to PHP3.1 billion as of end-June despite the 94-percent increase in provisioning to address any impact of post-movement restrictions vis-à-vis the coronavirus disease (Covid-19) pandemic.
It said the provisioning allocated for this year is higher by as much as 3.5 percent compared to what the bank allocated last year.
Meanwhile, the bank’s net income in the first six months this year was boosted by the 25-percent increase in gross revenues to PHP20.9 billion, which in turn was driven by the 20-percent increase in net interest income and the 32-percent jump of non-interest income.
The disclosure said core business was buoyed by the 49 basis points rise in net interest margin to 4.3 percent.
Trading gains as of end-June 2020 reached PHP5.7 billion, it said.
“This allowed the Bank to take a conservative approach and book higher provisions to proactively manage the headwinds that the entire industry is anticipating,” it said.
During the same briefing, RCBC Senior Vice President and head of Treasury Horacio Cebrero said the total of 175 basis points reduction to date in the Bangko Sentral ng Pilipinas’ (BSP) key policy rates also resulted in lower bank rates, which will benefit the borrowers.
He said banks also benefited from the rate reduction because it brought down their funding cost.
“The impact, we do believe, that it’s going to be very, very positive because it brought down the cost of borrowing of businesses, which they would really need for now,” he said.
Cebrero forecasts monetary authorities to keep key rates at current levels, citing BSP Governor Benjamin Diokno underscoring the need to monitor the impact of their rate decisions. (PNA)
