RIZAL Commercial Banking Corp. (RCBC) and East West Banking Corp. (EastWest Bank) saw their net incomes decline in the first nine months due to lower trading gains and revenues, respectively.
In a disclosure on Friday, RCBC said it posted a consolidated net income of P3.2 billion in the nine months ended September, down from its P3.4-billion profit in the same period last year, amid a decline in trading gains.
The bank said excluding trading gains, its core income went up 42% year-on-year as its main businesses continued to grow.
RCBC’s net interest income went up 12% to P14.7 billion as of September driven by a 12% growth in its loans to P379 billion. Average loan volume of its corporate segment grew 9%, while the SME segment expanded 32% and consumer by 33%, with credit card receivables growing 33%. RCBC’s microfinance arm Rizal MicroBank also grew its average loan portfolio by 20% year-on-year.
Still, despite the growth in its lending business, asset quality remained healthy, with its consolidated nonperforming loan (NPL) ratio at 1.22% from 1.41% last year. NPL coverage also improved to 96.94% at the consolidated level from last year’s 77.39%, while the level was at 141.84% at the parent bank level.
Meanwhile, RCBC’s gross income stood at P19.4 billion in the first nine months, with total operating income at P4.7 billion. Fee-based income grew 15%.
On the other hand, the bank’s operating expenses amounted to P14.4 billion in the period amid its continued branch expansion and higher documentary stamp taxes.
RCBC’s network grew to 509 branches as of September from 503 a year prior, while its automated teller machines were at 1,593 versus 1,539 the previous year.
The bank’s consolidated resources grew 17% to P614.4 billion. Deposits increased 10% to P410.1 billion, with its current accounts and savings accounts at P231.8 billion as of September.
Its capital position stood at P83.6 billion, with its capital adequacy ratio (CAR) at 17.28% and common equity Tier 1 (CET1) ratio at 14.45%.
Shares in RCBC went up 20 centavos or 0.72% to P28 each on Friday.
Meanwhile, the Gotianun-led EastWest Bank said in a separate disclosure on Friday that it booked a net income of P3.2 billion in the first nine months, 13% lower year-on-year mainly due to an increase in capital stock as well as the lower income contribution from its wholly-owned subsidiary EastWest Rural Bank (EWRB).
EWRB only resumed its lending program to public school teachers in late June after being suspended since November 2018.
EastWest Bank said its core recurring operating revenues increased by 8% year-on-year.
Its nine-month net income translated to a return on equity of 10.7% and return on assets of 1.4%.
The lender’s net interest income grew 6% to P14.5 billion as of September on the back of the expansion of its consumer lending businesses. Excluding teachers’ loans which declined, EastWest Bank’s consumer portfolio of credit cards, auto, home and personal loans went up 14%. Consumer loans accounted for 72% of its total loans. Meanwhile, its commercial lending business grew 6%.
“The increase in consumer loans allowed the bank to minimize the impact of lower margins as deposit interest rates rose faster and higher than loan rates,” EastWest Bank said.
Fees and commissions declined 16% to P3.4 billion due to the lower contribution from its rural bank subsidiary. On the other hand, trading income went up 33% to P444.8 million, driven by foreign exchange trading gains.
Meanwhile, the bank’s operating expenses went up 13% to P11.1 billion at end-September.
EastWest Bank’s total assets stood at P337.2 billion as of September, up 7% from the previous year.
Its CAR stood at 13.1%, while its CET1 ratio was at 10.6%, still above the regulatory minimums.
EastWest Bank shares finished at P10.56 apiece on Friday, down 10 centavos or 0.94%.