RIZAL COMMERCIAL Banking Corp.’s net income climbed in the first quarter. — BW FILE PHOTO

RIZAL COMMERCIAL Banking Corp. (RCBC) saw a surge in its net income in the first quarter backed by its strong core business and trading gains despite headwinds due to the coronavirus disease 2019 (COVID-19) pandemic.

RCBC’s net earnings climbed 77% year on year to P2.3 billion from January to March, the bank said in a filing with the local bourse on Monday.

“The robust performance of the core business and trading gains boosted the bottom line to reach P2.3 billion,” it said.

RCBC’s annualized return on equity stood at 11.1%, while annualized return on assets was at 1.28% during the first quarter.

During the period, gross revenues of the bank rose 23% to P10 billion, bolstered by net interest income and non-interest income, which grew 19% and 29%, respectively.

Interest income from loans and receivables increased by 12%, supported by higher volumes and sustained margins across all customer segments. Meanwhile, cost of funds declined by 71 basis points due to normalizing market interest rates during the first three months of the year.

The bank’s non-interest income also jumped by 29% on the back of higher trading and foreign exchange gains.

Meanwhile, RCBC said its operating efficiency improved as its cost-to-income ratio stood at 55.6%, better than the 64.2% registered last year.

RCBC’s loans to small and medium enterprises (SMEs) as well as its consumer loan segment logged a “pre-COVID” growth of 26% and 20%, respectively.

Likewise, credit card receivables also surged by 42%, with its card base climbing by 25% year on year to 914,000.

The bank’s net nonperforming loan (NPL) ratio improved to 2.2% from the 2.6% seen a year ago. NPL coverage ratio likewise rose to 76.2% as of March compared to the 67.3% seen a year ago.

RCBC said it allotted P1.6 billion in provisions for loan losses as of the first quarter of the year “as the bank aims to build sufficient buffers for COVID-related losses.”

The bank’s capital adequacy ratio settled at 13.8%, while common equity Tier 1 ratio was at 12.9%, both above the regulatory minimum.

Its total assets hit P715.3 billion while its capital stood at P84.7 billion as of end-March, the lender said.

The Yuchengco-led bank’s shares ended trading at P16.50 apiece, down by 0.60% or by 10 centavos from its previous close. — L.W.T. Noble