Rizal Commercial Banking Corporation · PSE:RCB
Rizal Commercial Banking — 9M 2023 Earnings Presentation
29 slides from Rizal Commercial Banking's earnings presentation, Nov 14, 2023
Slide 1: 9M 2023 Analysts' Briefing
9M 2023 Analysts’ Briefing November 14, 2023
Slide 2: Agenda
Agenda 01 Economic Outlook Michael L. Ricafort, RCBC Chief Economist 02 RCBC 9M 2023 Performance Chrissy P. Alvarez, RCBC Corporate Planning Head & CIO 03 Q&A 2
Slide 3: A few reminders…
A few reminders… If your connection gets cut, you Microphones will remain on mute If you have any concerns during may use the same link or meeting during the briefing proper and will the briefing, you may send us a details to get back in. be unmuted during the question message using the chatbox. and
Slide 4: A few reminders…
A few reminders… For easier identification, kindly set your meeting name to include your company or organization followed by your registered name. e.g., RCBC – Juan dela Cruz Queue your name using the chatbox for your questions. Each participant may ask two questions at a time. If you have more ques
Slide 5: Economic Outlook
Economic Outlook Mr. Michael L. Ricafort
Slide 6: 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 locally GDP Growth 5.7% 7.6% 5.5%-6.0% 1 If US CPI lowers to Fed’s target of 2%, this will justify and usher the start of Fed rate cuts especi
Slide 7: Philippine GDP growth estimates (2023-2024)
Philippine GDP growth estimates (2023-2024) Philippine GDP Growth Expected to be Among the Philippine GDP Growth Estimates* (2023-2024) Fastest For 2023 Multilateral 2023 2024 Institutions Forecast Forecast IMF 5.3% (from 6.2%) 6.0% (from 5.5%) ADB 5.7% (from 6.0%) 6.2% World Bank 5.9% (from 6.0%) 5
Slide 8: 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 3Q 2023: +5.9% Inflation/CPI for the month of October 2023 eased to year-on-year 4.9% year-on-year • PH GDP Growth (3Q 2023) is faster vs.4.3% in 2Q 2023 but • In October 2
Slide 9: 9M 2023 Performance
9M 2023 Performance Ms. Chrissy P. Alvarez
Slide 10: Steady recovery amid external headwinds
Steady recovery amid external headwinds Asset growth Total assets jumped on the back of 12% increase in customer loans Credit cards surpassed 1 million milestone in cards-in-force ₱1.2T ₱609B in total assets; 12% in loans; driven by Deposit rally driven mostly by CASA higher vs last year consumer So
Slide 11: Consolidated key financial items
Consolidated key financial items 9M 2023 9M 2022 Change % Change INCOME STATEMENT Net Interest Income 24,246 23,955 291 1.2% Fee Income 5,056 4,335 721 16.6% Gross Income 35,952 34,595 1,357 3.9% Operating Expenses 21,893 19,010 2,883 15.2% Impairment Losses 4,957 3,614 1,343 37.1% Net Income 9,032
Slide 12: Consolidated income items for the quarter
Consolidated income items for the quarter 3Q 2023 3Q 2022 Change % Change INCOME STATEMENT Net Interest Income 8,895 7,969 927 11.6% Fee Income 1,886 1,427 459 32.2% Gross Income 12,498 13,364 (867) (6.5%) Operating Expenses 7,575 6,779 796 11.7% Impairment Losses 1,502 1,745 (243) (13.9%) Net Incom
Slide 13: Record high revenues from NIM recovery and fees
Record high revenues from NIM recovery and fees Historical Revenues In Php Billions, except % 44 36 38 36 12.7 35 36 ▲13% CAGR 2018-23 11.6 7.6 27 13.5 10.6 11.7 6.1 Other Income 31 29 Net Interest Income 26 24 22 24 20 2018 2019 2020 2021 2022 3Q 2022 3Q 2023 13
Slide 14: NII on an upward trajectory; surpassing LY's highs
NII on an upward trajectory; surpassing LY’s highs Historical Monthly NII In Php Millions, except % 3,107 2,985 2,805 2,803 2,710 LY Ave. of 2,614 2,569 2,528 2,359 2,380 Jan-23 Feb-23 Mar-23 Apr-23 May-23 Jun-23 Jul-23 Aug-23 Sep-23 Net Interest Income LY Average 14
Slide 15: Loan growth amid the crisis & limited capital
Loan growth amid the crisis & limited capital Monthly Trend – Loan Portfolio 2019 to June 2023 Capital limits 12% YoY growth vs Sep 2022 6% 12% 8% Industry growth COVID-19 pandemic as of June 2023 5% 14% Industry growth 12% 5% Industry growth 1% Industry growth 11% Industry growth Jan Mar May Jul Se
Slide 16: Loans up across all customer segments
Loans up across all customer segments Loan Portfolio1 Loan Mix In Php Billions, except % As of September 2023 609 +12% Consumer SME Corp PL/SL 543 1% Auto 22% Housing 187 +24% 42% Consumer 151 31% Loans 609B Credit 49% Card 119 +13% 35% 105 20% 286 302 +6% Consumer segment posted a massive jump, acc
Slide 17: Improving NPL despite loan growth
Improving NPL despite loan growth Gross NPL amount and ratio Gross NPL ratio per segment In Php Billions, except % As of September 2023 40.0 6.00% 5.10% Corporate 2.24% 35.0 4.58% 5.00% SME 4.35% 4.04% 30.0 3.83% 3.91% 3.77% 3.75% 4.00% 25.0 Consumer 6.23% 20.0 3.00% Credit Card 3.99% 28.6 15.0 24.8
Slide 18: Deployed data science in various areas of the business
Deployed data science in various areas of the business Scientific leads qualification using AI machine learning models, robotic process automation & credit rules for cross-selling Credit scoring models to acquire good quality consumer loans customers Dynamic personalized campaigns based on segmented
Slide 19: Credit cards breached 1M milestone in cards-in-force
Credit cards breached 1M milestone in cards-in-force Cards-in-Force In 000s, Faster than industry card spend & balance 969 972 977 984 992 1,002 1,014 956 962 P97B P65B in issuing billings; 48% in total balances; 48% higher compared to improvement from last year ago levels year’s level Jan-23 Feb-23
Slide 20: Deposits jumped 13%, driven mostly by CASA
Deposits jumped 13%, driven mostly by CASA Historical Deposits & CASA In Php Billions, Cash management solutions continued to provide ▲21% uplift for deposits… CASA year-on-year growth 902 Bills, cash and checks 857 and DPU remain to be the main drivers of 672 collections 536 Cash Cube CheckScan 485
Slide 21: Maintained dominance in digital space
Maintained dominance in digital space 21
Slide 22: Multiple digital platforms for different segments
Multiple digital platforms for different segments All-in-one hub RCBC’s financial PH’s 1st neighborhood & RCBC’s industry-leading inclusion super app mobile banking app with last mile ATM network DiskarTech will pivot into a more bringing formal banking to rural the most comprehensive loans-focused
Slide 23: Launched RCBC Boz app last November 7
Launched RCBC Boz app last November 7 Designed for micro entrepreneurs, the RCBC Boz app allows business owners to manage their budgets, send invoices, pay employees and access reports – all in one app 23
Slide 24: Capital to reinforce RCBC's asset trajectory
Capital to reinforce RCBC’s asset trajectory Capital to complement business dev’t efforts Confidence to build the Bank’s loan portfolio and ▲18% capture bigger share y-o-y growth in customer loans Pan Malayan Management and 14% Investment Corp. (PMMIC) Additional capital to build 18.7% resilience ag
Slide 25: Consolidated key financial indicators
Consolidated key financial indicators 9M 2023 9M 2022 Change PROFITABILITY Return on Equity 9.8% 11.2% -1.4% Return on Assets 1.1% 1.2% -0.2% Net Interest Margin 3.4% 3.9% -0.5% COST EFFICIENCY Cost-to-Income Ratio 60.9% 54.9% 5.9% ASSET QUALITY Net NPL Ratio 1.8% 2.1% -0.4% NPL Coverage Ratio 85.2%
Slide 26: Question & Answer
o = a) = <x B c 2 in) Y = Oo 26
Slide 27: For more information about RCBC, please contact Investor_Relations@rcbc.com
For more information about RCBC, please contact Investor_Relations@rcbc.com 27
Slide 28: Thank you
Thank you 28
Slide 29: 9M 2023 Analysts' Briefing
9M 2023 Analysts’ Briefing November 14, 2023
Rizal Commercial Banking — 9M 2023 Earnings Presentation on 6ix