THE BANGKO SENTRAL ng Pilipinas (BSP) raised P100 billion as planned through its offer of 28-day bills on Friday as yields dropped slightly after the central bank kept benchmark rates steady at its latest policy meeting.

Demand for the one-month securities reached P120.926 billion, more than the P116.024 billion in tenders logged on May 7.

“The results of the auction continue to support the view that market conditions remain normal amid sustained ample liquidity in the financial system,” BSP Deputy Governor Francisco G. Dakila, Jr. said in a statement.

Accepted rates for the short-term securities ranged from 1.7625% to 1.8%, a tad wider than the 1.77% to 1.8% band a week earlier. This caused the 28-day bills’ average rate to slip by 0.91 basis point to 1.7739% from 1.783% last week.

The BSP uses the short-term bills and its term deposit facility to mop up excess liquidity in the system and guide short-term interest rates.

The lower yields for the short-term bills came following the central bank’s decision to keep borrowing costs unchanged, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a text message.

The BSP held its key interest rate at a record low for a fourth straight meeting on Wednesday, as it continues to support the economy’s recovery from the pandemic.

The Monetary Board maintained the overnight reverse repurchase rate at a historic low of 2%, in line with expectations of 15 out of 17 analysts in a BusinessWorld poll last week. Both the lending and deposit rates were also kept at 2.5% and 1.5%, respectively.

The BSP’s decision to keep rates steady came a day after release of disappointing first-quarter gross domestic product (GDP) data. For the first three months of 2021, GDP shrank by an annual 4.2%, keeping the economy in a recession for a fifth consecutive quarter.

Meanwhile, the central bank lowered its inflation outlook this year to 3.9% from a previous estimate of 4.2%. On the other hand, the forecast for 2022 was raised to 3%, from 2.8% previously. This will put inflation back within the BSP’s 2-4% annual target range. — LWTN

SECURITY BANK Corp. posted a lower net profit in the first three months of 2021 amid a decline in its trading gains as well as its earnings from loans and investments.

The lender’s net income dropped 43% to P1.643 billion in the January to March period from P2.888 billion a year earlier, the bank said in its financial report filed with the local bourse on Friday.

Return on shareholders’ equity was 5.38%, down from 9.7% as of March 2020, while return on assets also dropped to 0.96% from 1.46%.

Net interest income went down by 17.7% to P6.649 billion from P8.085 billion as interest earnings on both loans and investments dropped.

The bank’s net interest margin declined by 29 basis points year on year to 4.39%.

Meanwhile, non-interest income dropped 58% to P2.1 billion. This was dragged by the decline in its gains from securities trading, which shrank by 80% to P689 million from P3.5 billion.

On the other hand, income from service fees and commissions inched up 1% to P1.1 billion, backed by higher gains from bancasurrance, credit card, stockbrokerage and miscellaneous fees.

Total operating income stood at P8.784 billion, down by 33% from the P13.215 billion a year ago.

Security Bank’s gross loans inched down by 5% to P450 billion from a year earlier. By segment, retail loans went down by 12%, while wholesale loans dropped by 2%.

Its gross non-performing loan (NPL) ratio stood at 3.41%, lower than the 3.9% seen in the previous quarter, while its net NPL ratio was at 1.55% (from 1.97%). The bank’s NPL reserve cover improved to 118% from 115% as of end-2020.

On the other hand, the bank’s total operating expenses dropped 49.76% to P5.465 billion from P10.879 billion in the first three months of 2020.

Provisions for credit losses declined 93% to P402 million due to base effects.

Meanwhile, total deposits rose by 3% to P519 billion as of March. Low-cost savings and demand deposits increased by 12%, while high-cost deposits dropped by 5%.

The lender’s assets went down by 9% to P718 billion as of March, while shareholders’ capital inched up by 1% to P121 billion.

Security Bank’s capital adequacy ratio stood at 20.11% at end-March, up from 20.09% as of December 2020, while its common equity Tier 1 ratio was at 19.23% (from 19.19%), both above the minimum regulatory requirements.

“We are fortunate that our strong capital equips the bank to support clients directly through loans and indirectly through significant investments in both our team and our technology to improve customer experience,” Security Bank President and Chief Executive Officer Sanjiv Vohra was quoted as saying.

The bank said it had a total of 315 branches and 772 automated teller machines to date.

Security Bank shares closed at P115.30 apiece on Friday, up by 20 centavos or by 0.17%. — LWTN

RIZAL COMMERCIAL Banking Corp. (RCBC) posted lower net earnings in the first three months of 2021, dragged by trading losses and lower foreign exchange gains.

The bank’s net profit decreased by 31.55% to P1.58 billion in the first quarter from P2.308 billion in the same period a year earlier, based on its financial statement filed with the local bourse on Friday.

This translated to return on average assets of 0.82% as of March on a consolidated basis, up from the 0.68% seen at end-2020, while return on average equity also rose to 6.23% from 5.54%.

Net interest income rose by 2.3% to P6.465 billion in the period from P6.319 billion a year ago on the back of lower funding costs.

This was offset by the 49.7% drop in its other operating income to P1.848 billion from P3.674 billion last year as it booked a trading and securities loss and lower gains from foreign exchange.

Broken down, RCBC’s income from service fees and commissions jumped by 49.4% to P1.335 billion, while those from trust fees increased by 30% to P91 million.

On the other hand, foreign exchange gains slumped by 82.9% to P47 million. It booked a trading and securities loss of P35 million in the first quarter, a reversal of the P2.157 billion in gains in the same period of 2020.

The bank’s provisions for impairment losses stood at P936 million, lower by 41% from the P1.601 billion it set aside in the same period last year. RCBC said this was because it already had a “significant build-up of reserves in 2020 in anticipation of the uptick in loan defaults”.

On the other hand, other operating expenses rose by 2.4% to P5.692 billion from P5.556 billion last year.

“The expenses on investments and transactions related to business growth offset the savings from digital efforts and channel rationalization,” the bank said.

RCBC’s gross loan portfolio increased by 7% to P481.7 billion as of March from a year earlier, backed by the growth in the corporate (8%) and small and medium enterprise (10%) segments.

“There has been a significant improvement in overall credit and payment activity and more customers are accessing the bank’s retail and corporate online payment channels,” it said.

RCBC’s non-performing loan ratio stood at 3.15%, higher than the 2.94% as of end-2020.

Meanwhile, total deposits with the bank increased 15% to P562.9 billion, driven mainly by low-cost current account, savings account deposits, which jumped by 22%.

The bank said its assets rose by 12% to P800.8 billion as of March, with loans and receivables making up 61% of the total and investment securities cornering a 15% share.

RCBC’s capital base stood at P102.5 billion, with its capital adequacy ratio at 15% (down from 15.86% as of end-2020), while common equity Tier 1 ratio stood at 11.6% (from 12.28%), both well above minimum regulatory requirements.

“The pandemic may have challenged us in so many ways, but it has only reaffirmed our commitment to push forward with our digital acceleration in order to provide the best customer experience,” RCBC President and Chief Executive Officer Eugene S. Acevedo was quoted as saying in the statement.

RCBC shares closed at P17.50 apiece on Friday, down by 10 centavos or 0.57% from its previous finish. — L.W.T. Noble

THE PESO logged its best close versus the greenback in more than four years on Friday, on the back of data showing higher dollar reserves as of April.

The local unit closed at P47.81 per dollar on Friday, gaining 10.5 centavos from its P47.915 finish on Wednesday. The market was closed on Thursday in view of Eid’l Fitr.

The peso’s close on Friday was its best finish in more than four years or since Sept. 15, 2016, when it ended trading at P47.695 per dollar, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said.

Week-on-week, it also appreciated by 4.5 centavos against its P47.855-per-dollar finish on May 7.

The peso opened Friday’s trading session at P47.83 against the dollar. Its weakest showing was at P47.87 while its intraday best was at P47.775 versus the greenback.

Dollars exchanged declined to $634.3 million from $869.05 million on Wednesday.

Market sentiment was boosted by data showing higher gross international reserves (GIR) as of April, pushing the peso higher, Mr. Ricafort said.

The country’s foreign exchange reserves hit $107.25 billion as of end-April, the Bangko Sentral ng Pilipinas (BSP) reported on Friday. This was higher by 2.65% from the $104.48-billion level as of March.

The peso was also supported by the central bank’s decision keep benchmark rates steady, UnionBank of the Philippines, Inc. Chief Economist Michael L. Ricafort said.

The BSP held its key interest rate at a record low for a fourth straight meeting on Wednesday, as it continues to support the economy’s recovery from the pandemic.

The Monetary Board maintained the overnight reverse repurchase rate at a historic low of 2%, in line with expectations of 15 out of 17 analysts in a BusinessWorld poll last week. Both the lending and deposit rates were also kept at 2.5% and 1.5%, respectively. — LWTN

BDO LEASING and Finance, Inc. recorded a net income of P9.5 million in the first quarter, purely from gains from its investments after the company’s restructuring.

“The company’s first quarter performance is not comparable to the P83.3-million profit recorded a year ago, given that last year’s results reflected business operations prior to the full implementation of the group’s restructuring of its leasing business,” the firm said in a filing with the Philippine Stock Exchange.

In the first three months of 2021, BDOLF’s investments had a fair value gain of P13.6 million. Meanwhile, total expenses hit P4.5 million.

BDOLF said it has stopped operating as a leasing company and has not been engaged in new leasing transactions since October 2020.

“The restructuring entailed the full transition of BDOLF operations to BDO Finance Corp., established in 2019 to offer customers continued access to lease products and services. BDO Finance likewise assumed the lease transactions booked in BDOLF to ensure continuity to the latter’s existing clients,” it said.

BDOLF’s book value per common share increased by 5.7% to P2.76 in the first quarter from P2.61% in the same period of 2020.

The company booked a net income of P252.3 million in 2020, surging from the P46.8 million seen in 2019 as it saw lower funding costs. — LWTN