RCBC targeting to further grow its sustainable lending portfolio

RIZAL COMMERCIAL Banking Corp. is looking at more green issuances.

RIZAL COMMERCIAL Banking Corp. (RCBC) is looking to continue growing its sustainable loan portfolio, with credit to the sector already consisting a tenth of its book after issuing green bonds in 2019.

“In RCBC, our sustainable portfolio is 10% of our loan and it is growing,” RCBC Chief Risk Officer and Head of Corporate Risk Management Services Jamal Ahmad said in a briefing on Thursday in Makati.

This 10% represents P51.7 billion of the bank’s total loan portfolio as of end-December 2019.

“Our strategic objective is to grow this book and continue to make a positive impact. We will aspire to keep growing this without setting specific targets at this point,” Mr. Ahmad said.

The bank raised P15 billion from its 1.5 year green bonds back in January 2019, with proceeds said to be earmarked for RCBC’s expansion and initiatives in the green space.

In June last year, RCBC also issued P8 billion worth of ASEAN sustainability bonds with a tenor of two years and a yield of 6.15% per annum paid quarterly until May 2021.

Meanwhile, in September, it raised $300 million from dollar-denominated bonds which were also under its sustainable finance framework and part of its medium-term note program at a yield of three percent per annum.

“The demand has been very good for the issues that we’ve got,” Mr. Ahmad said, noting that their bonds were oversubscribed.

RCBC said in a statement that it allocated P39 billion of the net proceeds from its green and sustainability bond issuances in 2019 for projects geared towards sustainability.

It said it used P29.8 billion to fund 17 eligible green projects on renewable energy, energy efficiency, clean transportation, and sustainable water management.

The bank has also entered 12 renewable financing deals within the region, it said.

RCBC’s net earnings jumped 41% to P4.5 billion from January to September 2019 from the P3.2 billion booked in the comparable year-ago period.

Interest income from loans and receivables grew by 24% to P24.1 billion in the nine-month period on the back of higher average loan volume of selected markets.

RCBC’s shares ended trading at P20.50 each on Thursday, down by 0.97% or by 20 centavos from Wednesday’s close. — L.W.T. Noble