Rizal Commercial Banking Corporation · PSE:RCB
Rizal Commercial Banking — 1H 2023 Earnings Presentation
31 slides from Rizal Commercial Banking's earnings presentation, August 2023
Slide 1: RCBC 1H 2023 Investor Presentation
RCBC 1H 2023 Investor Presentation 1
Slide 2: Disclaimer
Disclaimer ANY INVESTMENT DECISION TO PURCHASE SECURITIES IN THE CONTEXT OF A PROPOSED OFFERING, IF ANY, SHOULD BE MADE ON THE BASIS OF THE FINAL TERMS AND CONDITIONS OF THE SECURITIES AND THE INFORMATION CONTAINED IN THE OFFERING CIRCULAR PUBLISHED IN RELATION TO SUCH AN OFFERING AND NOT ON THE BAS
Slide 3: Investor Presentation agenda
Investor Presentation 1Q 2023 01 Economic Outlook 02 RCBC 1Q 2023 Performance 03 General Information 04 Appendix
Slide 4: Economic Outlook
Economic Outlook Mr. Michael L. Ricafort RCBC Chief Economist 4
Slide 5: Market forecasts and catalysts for 2023
Market forecasts and catalysts for 2023 Key Market Catalysts: Economic 2021 2022 2023 Indicators Actual Actual Forecast Possible Fed rates cuts to be matched by BSP in 2024. GDP Growth 5.7% 7.6% 5.5%-6.5% 1 By end of 2023, possible +0.25 hike or pause after mixed US economic data; after recent hikes
Slide 6: Philippine GDP growth estimates (2023-2024)
Philippine GDP growth estimates (2023-2024) Philippine GDP Growth Expected to be Philippine GDP Growth Estimates* (2023-2024) Among the Fastest For 2023 Multilateral 2023 2024 Institutions Forecast Forecast IMF** 6.2% (from 6.0%) 5.5% (from 5.8%) ADB 6.0% 6.2% World Bank 6.0% (from 5.6%) 5.9% (up to
Slide 7: Better-than-expected inflation rate; interest rates still rise until potential Fed rate cuts
Better-than-expected inflation rate; interest rates still rise until potential Fed rate cuts Philippine economic/GDP growth for 1Q US CPI/inflation for the month of June 2023 2023: 6.4% year-on-year eased further to 3%, after 4% in May 2023. • In July 2023, inflation slowed to 4.7%. Meanwhile • US G
Slide 8: RCBC 1H 2023 Performance
RCBC 1H 2023 Performance Ms. Chrissy P. Alvarez RCBC Corporate Planning Head and Chief Information Officer 8
Slide 9: Performance Highlights and Business Updates
Performance Highlights and Business Updates P6.2B 1H profits reached an all-time high of P6.2B for the first 6 months of 2023 on the back of a solid 14% growth in total loans. Return on equity in net income hit 11%, a massive improvement from previous years. +17% Loans rose double-digit across all s
Slide 10: 1H profits reached all-time high of P6.2B
1H profits reached all-time high of P6.2B 1H2023 1H2022 Change % Change INCOME STATEMENT Gross Income [1] 23,455 21,231 2,224 10.5% Net Interest Income 15,351 15,986 (635) (4.0%) Fee Income 3,170 2,908 262 9.0% Operating Expenses 14,318 12,231 2,087 17.1% Net Income 6,220 6,135 85 1.4% BALANCE SHEET
Slide 11: Assets up 17% on the back of 14% increase in loans
Assets up 17% on the back of 14% increase in loans This was on the back of double-digit increase in Earning assets rose 16% year on year customer loans and investment securities 580 927 510 +14% year-on-year 799 growth 2Q 2022 2Q 2023 Loans 676 339 283 +20% year-on-year growth 2Q 2021 2Q 2022 2Q 202
Slide 12: Double-digit growth across all segments
Double-digit growth across all segments Loan Portfolio1 Loan Mix In Php Billions, except % As of June 2023 PL/SL Consumer SME Corp 1% Auto 580 +14% 23% Housing 510 42% Consumer 30% Loans 172 +18% Credit 147 50% 580B Card 34% 117 +18% 99 20% 289 Corporate improved significantly in 2Q 2023, 263 +10% a
Slide 13: Improved NPLs despite growth in assets
Improved NPLs despite growth in assets Net NPL Amount and Ratio Net NPL ratio per Segment In Php Billions, except % As of June2023 Corporate 0.8% 25.0 3.30% 3.50% 3.17% 3.00% SME 1.7% 20.0 2.73% 2.50% 2.15% Consumer 5.1% 15.0 2.00% 1.99% 1.91% 2.00% Credit Card 0.7% 1.50% 10.0 18.3 17.8 14.8 The Ban
Slide 14: Solid momentum in deposits, CASA up by 17%
Solid momentum in deposits, CASA up by 17% Historical Deposits and CASA In Php Billions Cash management solutions continued to provide uplift for deposits… 17% 857 900 CASA year-on-year growth 672 Cash Cube CheckScan QR Pay 536 457 467 423 421 on top of stronger corporate and SME 373 banking relatio
Slide 15: Building the favored digital banking brand
Building the favored digital banking brand 47.3B 2023 will see DiskarTech 2881 gross transaction pivot into a more capable value; up 31% from LY ATM Go terminals and loans-focused app with a refreshed user 1386 interface (UX) and faster 87.5M onboarding in total revenues; up partner merchants 25% fr
Slide 16: Frontrunner in sustainable financing in the Philippines
Frontrunner in sustainable financing in the Philippines 16
Slide 17: Institutionalizing ESG principles
Institutionalizing ESG principles Supporting clean energy Effective employee management • Solid pipeline of renewable energy • Better-than-industry retention projects • PMAP award for “Regional Exemplar for Strategic • Ceased funding of coal; remaining HR” and “People Program of the Year” for the ex
Slide 18: Start of an enduring partnership
Start of an enduring partnership RCBC completed the sale of an additional 15% stake to SMBC through a P27B capital infusion. Confidence to build 300 bps our loan book and uplift in the Bank’s capture bigger share CET1 ratio Pan Malayan Management and Investment Corp. Nomination of two (2) board 18.7
Slide 19: Consolidated key financial indicators
Consolidated key financial indicators Jun-23 Jun-22 Change PROFITABILITY Return on Equity 11.1% 9.5% 1.6% Return on Assets 1.1% 1.1% 0.0% Net Interest Margin 3.3% 4.0% -0.7% COST EFFICIENCY Cost-to-Income Ratio 61.1% 57.6% 3.5% ASSET QUALITY Net NPL Ratio 1.9% 2.7% -0.8% NPL Coverage Ratio 84.3% 69.
Slide 20: General Information
yee S. [Rohe General Information
Slide 21: Key milestones in the RCBC story
Key milestones in the RCBC story RCBC was incorporated and RCBC Savings Bank was IFC acquired an approximately RCBC completed a PHP15bn 1960 began operations in Rizal 1996 incorporated to provide 2011 7.2% stake in RCBC 2018 (USD280m) rights issue retail/consumer banking CVC Capital Partners acquire
Slide 22: Investment Information
Investment Information Equity Profile Dividend History1 Credit Rating Dividends Pay-out Particulars 2Q 2023 Year per share ratio Ticker RCB 2023 1.08 19.93% Long Term Deposit Baa3 Outstanding Senior Unsecured Baa3 2,037.48M 2022 0.62 20.00% shares Baseline Credit Stock Price 23.5000 2021 0.49 19.96%
Slide 23: Ownership Structure
Ownership Structure Cathay Life Insurance, founded in 1962, is Taiwan’s largest insurance company. It is owned by Cathay Financial Holding, one of the largest financial holding 18.7% Pan Malayan Management and companies in Taiwan. Investment Corp. (PMMIC) 33.9% Sumitomo Mitsui Banking Corporation is
Slide 24: Appendix
Appendix 24
Slide 25: Consolidated Income Statement
Consolidated Income Statement 1H 2023 1H 2022 Change % Change Interest Income 30,712 20,749 9,963 48.0% Interest Expense 15,362 4,763 10,598 222.5% Net Interest Income 15,351 15,986 (635) -4.0% Other Income 8,104 5,245 2,859 54.5% Trading Gains and Forex 449 86 363 421.5% Trust Fees 217 205 11 5.5%
Slide 26: Consolidated Balance Sheet
Consolidated Balance Sheet 1H 2023 1H 2022 Change % Change Cash/Due from BSP & Other Banks 181,811 148,316 33,495 22.58% Investment Securities 339,318 283,354 55,964 19.75% Loans (net of Interbank) 576,772 506,589 70,184 13.85% Other Assets 76,367 65,047 11,320 17.40% TOTAL ASSETS 1,003,305 170,962
Slide 27: Historical Consolidated Income Statement
Historical Consolidated Income Statement 2019 2020 2021 2022 1H 2023 Net Interest Income 22.4 26.3 28.8 31.2 15.4 Other Income 13.5 11.6 7.6 13.2 8.1 Gross Income 35.9 37.9 36.4 44.5 23.5 Impairment Losses 7.4 9.4 6.0 5.7 3.5 Income before Operating Expenses 28.5 28.5 30.3 38.7 20.0 Operating Expens
Slide 28: Historical Consolidated Balance Sheet
Historical Consolidated Balance Sheet 2019 2020 2021 2022 1H 2023 Cash/Due from BSP/Due from Other Banks 123 148 157 181 182 Loans Arising From REPO 6 13 12 9 29 FVPL/FVTCI 60 45 56 122 111 Held to Maturity Investments 101 43 164 252 229 Interbank Loans and Receivables 19 43 31 28 11 Loans (net) 430
Slide 29: Historical Key Financial Indicators
Historical Key Financial Indicators 2019 2020 2021 2022 1H 2023 Return on Average Capital Funds 6.50% 5.50% 6.70% 11.24% 11.11% Return on Average Assets 0.80% 0.70% 0.80% 1.17% 1.11% Net Interest Margin 4.00% 4.30% 4.10% 3.70% 3.28% Cost-to-Income Ratio 60.80% 58.20% 61.90% 56.46% 61.05% CASA to Tot
Slide 30: RCBC is recognized for its strong franchise across business lines
RCBC is recognized for its strong franchise across business lines 30
Slide 31: For more information about RCBC, please contact Investor_Relations@rcbc.com
For more information about RCBC, please contact Investor_Relations@rcbc.com 31
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