November 21, 2017 | MANILA, PHILIPPINES

RCBC’s 2016 profit pulled down by regulatory fine

RIZAL Commercial Banking Corp. (RCBC) saw its net income slip from a year ago on the back of higher operating expenses due to a penalty imposed by the central bank, although offset by a double-digit rise in interest gains.

In a disclosure to the Philippine Stock Exchange, the Yuchengco-owned lender said it booked a P3.86 billion net income in 2016. This figure is down by a fourth from the bank’s P5.129 billion bottom line in 2015, according to the bank’s audited financial statements for that year.

Net interest income totalled P15.7 billion, led by a surge in lending that climbed by 11.42% from a year ago. In particular, consumer loans jumped by 18.8%, while credit extended to small and medium-scale firms grew by a tenth, the bank said.

Profits from fees and commissions reached P3.42 billion, which helped drive total operating earnings to P22.81 billion, slightly higher than the P22.232 billion recorded in 2015.

In contrast, operating costs rose by 7.4% to P16.34 billion from P15.061 billion previously as the bank pursued expansion activities. The figure excludes RCBC’s payment of P500 million to the Bangko Sentral ng Pilipinas (BSP) last August, which is half of the fine imposed by the regulator for its misdeeds related to the $81-million Bangladesh cyber heist.

The BSP slapped a P1 billion penalty on RCBC after breaching rules that allowed the transfer of $81 million stolen from the Bangladesh central bank into the Philippines. The case is considered the biggest cross-border money laundering case in the country.

Still, the country’s ninth biggest lender reported that total deposits rose to P353.07 billion, while total consolidated assets amounted to P521.46 billion.

“2016 has been a very challenging year in the history of RCBC. But through it all, the Bank emerged stronger and more resilient, having tested to its full capability all its resources,” RCBC president and chief executive officer Gil A. Buenaventura was quoted as saying in the statement.

Mr. Buenaventura assumed the top post at RCBC in July, replacing former president Lorenzo V. Tan who opted to resign after the cyber heist was uncovered.

RCBC also reported high asset quality as of end-2016, with soured debts held by the parent bank at 0.17% of its total loan portfolio and with more than enough cover for potential defaults. The bank also reported a 16.16% capital adequacy ratio, well above the BSP’s 10% requirement and the international 8% standard, the bank told the local bourse.

The bank increased its branch network to 481 nationwide as of end-December, while automated teller machines grew to 1,488.

RCBC shares gained five centavos to close at P41.75 apiece on Friday.