Rizal Commercial Banking Corp. (RCBC) reported lower preliminary net earnings in the first nine months of only P3.50 billion from year-ago profits reaching P3.62 billion. This developed in the wake of the hugely punitive fine of P1 billion imposed on the lender by the Bangko Sentral ng Pilipinas (BSP) for its role in the $81-million Bangladesh Bank cyber heist in March.
In a regulatory filing on Friday, the banking arm of the Yuchengco Group of Companies posted a preliminary P3.50-billion consolidated net income for the January-to-September period, significantly lower than a year earlier.
However, the bank said, excluding trading gains and the one-off item costing the RCBC P1 billion in fees, core earnings increased by 33 percent year-on-year.
The penalty was the largest ever imposed on any lending institution in the country. RCBC already paid half, or P500 million, with the other P500 million a year later.
“RCBC continues to be resilient despite all the challenges. As early as August of this year, we already recorded in our books the full P1-billion supervisory enforcement action by the BSP. RCBC is ready to rise above and move forward as we endeavor to implement reforms and improvements that will help the bank achieve its long-term objectives,” RCBC President and CEO Gil A. Buenaventura said in a statement.
In February hackers managed to transfer $81 million from the Bangladesh central bank under false names set up at the Jupiter Street branch of RCBC in Makati City.
Branch officials were found having broken numerous banking regulations, including the failure to act immediately on Bangladesh’s repeated warnings that the transactions were suspicious, as established at a subsequent Senate investigation.
Moving forward, the lender’s net interest income increased to P11.86 billion, from P11.46 billion in 2015, equal to 67.5 percent of total gross income of P17.56 billion.
Interest income from its lending business grew by 11.84 percent year-on-year.
Operating earnings was up by P237 million year-on-year to P5.70 billion and was reflected in 32.5 percent of the RCBC’s total gross income. The growth was anchored by higher foreign exchange, trading gains and as well as miscellaneous income.
Excluding the bank’s P500-million initial settlement, other operating expenses rose by 8.63 percent year-on year to P12.06 billion on the back of its branch and automated teller machine (ATM) network expansion.
Total fees and commissions, which accounted for 45 percent of operating income, totaled P2.57 billion.
Meanwhile, total deposits of P332.96 billion expanded by P13.14 billion quarter-on-quarter. Casa deposits reached P198.82 billion, translating to Casa-to-total deposits ratio of 59.71 percent as of end-September.
Its total consolidated assets expanded to P504.35 billion, while capital funds were at P60.74 billion.
RCBC ended the period with 477 branches nationwide versus 448 for the same period last year, while ATMs increased to 1,475 from 1,295.
“This resulted to a 3.09 branch-to-ATM ratio, one of the highest in the industry. Meanwhile, the number of Bankard credit-card holders reached 524,000, or an increase of 8.0 percent year-on-year,” the bank said.