Rizal Commercial Banking Corporation · PSE:RCB
Rizal Commercial Banking — 1H 2022 Earnings Presentation
37 slides from Rizal Commercial Banking's earnings presentation, 2022
Slide 1: Investor Presentation 1H 2022
Investor Presentation 1H 2022 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 1H 2022 Agenda
Investor Presentation 1H 2022 1 Economic Overview Heading towards normalcy 2 RCBC 1H 2022 Overview Sustained core business growth 3 General Information Investment information and ownership 4 Appendix Other financial information 3
Slide 4: Economic Overview
Investor Presentation 1H 2022 1 Economic Overview 4
Slide 5: A challenging macroeconomic outlook
A challenging macroeconomic outlook Weaker peso, higher inflation characterized 2Q 2022. Looking forward, is the worst over for the economy? 140 39% YTD Jun 2022 NYMEX CRUDE OIL PRICE • Russia-Ukraine war 120 • But eased to new 6-month lows recently, 100 105.76 END OF 2Q 2022 erasing all its gains s
Slide 6: Industries continue to recover
Industries continue to recover Real GDP grew 7.4% in 2Q 2022. Easing COVID restrictions strongly support industry recovery, but still weighed by higher input prices, supply chain disruptions Gross Value Added of Major Borrowing Industries (vs. pre-pandemic) in PHP bn; 2018=100; National Accounts 1,2
Slide 7: The Bank expects recovery in 2022 and beyond
The Bank expects recovery in 2022 and beyond 2023 2022 2021 Economic Indicators* Forecast Forecast Actual GDP Growth 6.0%-6.5% 6.0%-7.0% 5.7% USD/PhP (Year-End) 55.50-56.50 54.00-56.00 50.999 USD/PhP (Average) 55.75-56.75 53.50-54.50 49.25 Inflation (Average) 3.5%-4.0% 5.0%-5.5% 3.9% BSP Policy Rate
Slide 8: Summary
Summary • Challenging 2Q 2022 for the financial INVESTMENT markets due to weaker peso, higher inflation and interest rates • We are headed towards greater CREDIT normalcy; some industries are already back to pre-pandemic levels • We have seen the worst as prices of oil OUTLOOK and other global commo
Slide 9: 1H 2022 Overview
Investor Presentation 1H 2022 2 1H 2022 Overview 9
Slide 10: 1H 2022 Highlights
1H 2022 Highlights 6.1B 59% 1.0T Net income Investment Total assets up 84% securities growth up 19% 400B 15.5% Low-cost Capital adequacy CASA up 18% ratio 10 Note: Percentage growth numbers are based on YoY Growth: June 2022 vs. June 2021
Slide 11: RCBC is a leading financial services provider in the PH
RCBC is a leading financial services provider in the PH Incorporated in 1960, RCBC is the 6th largest private universal bank in the Philippines by assets as of end-June 2022. It was also recognized as the Best Digital Bank, Best Retail Bank and Best Corporate Bank in the Philippines by various award
Slide 12: RCBC's profit climbed 84% in 1H 2022
RCBC’s profit climbed 84% in 1H 2022 *Amounts in PhP Millions, except % and ratios [2] Loans and Receivables net of Allowances and Interbank Loans [1] Including trading and FX gains
Slide 13: 2Q 2022 net income jumped 129% vs 2Q 2021
2Q 2022 net income jumped 129% vs 2Q 2021 *Amounts in PhP Millions, except % and ratios [2] Loans and Receivables net of Allowances and Interbank Loans [1] Including trading and FX gains
Slide 14: Robust core business performance drive profitability
Robust core business performance drive profitability Gross income increased by 24% year-on-year Earning assets likewise grew by 19%. driven by the 18% rise in net interest income 12 11.3 9.8 720 758 813 799 604 676 10 9.1 9.3 8.3 8.6 8 1Q 2021 2Q 2021 3Q 2021 4Q 2021 1Q 2022 2Q 2022 Earning Assets [
Slide 15: Strong loan expansion guided by prudent risk management
Strong loan expansion guided by prudent risk management Gross Loan Portfolio1 Loan Mix In Php Billions, except % As of June 2022 19% 510 52% 510B Credit 62% Housing Card 487 27% 44% 29% Consumer PL/SL Loans 147 1% 141 4% Auto 28% 87 14% 99 Return on Risk Assets3 3-Yr RORA (Average) 258 2% 263 Corpor
Slide 16: NPL continued to ease due to tightened credit and proactive remedial management
NPL continued to ease due to tightened credit and proactive remedial management Net NPL Amount and Ratio Net NPL per Segment In Php Billions, except % As of June 2022 25.0 3.3% 3.3% 3.3% 3.5% Corporate 0.5% 3.2% 3.2% 3.0% 20.0 2.7% 2.5% SME 2.4% 15.0 2.0% Consumer 9.1% 1.5% 10.0 18.0 18.3 17.8 16.1
Slide 17: Record high deposits up by 24% year-on-year
Record high deposits up by 24% year-on-year Robust deposit build-up will continue by improving our sales productivity through technology, tapping the growing middle class with products for the mass affluent, and offering a wide range of cash management products for Corporate and SME clients Deposits
Slide 18: Innovative digital solutions drove customer acquisition and increased usage
Innovative digital solutions drove customer acquisition and increased usage particularly for corporate accounts Corporate Cash Management Clients (CCM) In 000s 20.6 19.4 15.6 ▲22% Check Scan Facility 13.0 CAGR 2019-21 Dec19 Dec20 Dec21 Jun22 Volumes In PhP Billions 778 CashCube ▲46% 556 458 351 363
Slide 19: Retail and digital transactions augment fee revenues
Retail and digital transactions augment fee revenues Fee Income Fee Income In Php Billions Breakdown by source 13% P2.9B YoY 4% 55% 11% YoY P2.6B 6% 42% 3%3% 7% 11% 9% 7% 41% 1.7 10% 21% 1.4 1.1 1.3 1.2 1.1 Jun 2022 25% Jun 2021 1Q 2021 2Q 2021 3Q 2021 4Q 2021 1Q 2021 2Q 2022 Debit & Credit Cards Tr
Slide 20: RCBC Digital app made even more powerful
RCBC Digital app made even more powerful RCBC continued to introduce industry-leading digital solutions with the addition of features such as payroll loan and UnliPay. QR Payments Check deposit Eligible RCBC Payroll account holders can now Forex trading easily avail of short term loans all online UI
Slide 21: RCBC continues to ramp up its digital platforms
RCBC continues to ramp up its digital platforms Sustained digital adoption as RCBC continues digital transformation by rolling out new initiatives and system enhancements RCBC Digital Transaction Transaction Value Volume 53% 38% growth year-on-year growth year-on-year DiskarTech Transaction Transact
Slide 22: RCBC at the forefront of sustainable financing
RCBC at the forefront of sustainable financing We are the first Philippine universal bank to issue sustainable AA financing instruments under ASEAN bond standards ESG rating PhP 68B 58% PhP 14.8B Loans under our Sustainable Related to renewable energy and Raised from the issuance of Portfolio energy
Slide 23: Consolidated key financial indicators
Consolidated key financial indicators Jun 2022 Jun 2021 Change PROFITABILITY Return on Equity 9.5% 6.6% 2.9% Return on Assets 1.1% 0.8% 0.2% Net Interest Margin 4.0% 4.1% (0.1%) COST EFFICIENCY Cost-to-Income Ratio 57.6% 65.2% (7.6%) ASSET QUALITY Net NPL Ratio 2.7% 3.3% (0.5%) NPL Coverage Ratio 69
Slide 24: RCBC is recognized for its strong franchise across business lines
RCBC is recognized for its strong franchise across business lines 24
Slide 25: General Information
Investor Presentation 1H 2022 3 General Information 25
Slide 26: 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 27: Yuchengco Group of Companies
Yuchengco Group of Companies RCBC is a member of the Yuchengco Group of Companies (YGC), one of the premier business conglomerates in the Philippines. The Group is engaged in a wide range of financial and non-financial services. The synergies among these companies allow customers to access a wide ra
Slide 28: 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 companies in Taiwan. 22.18% Pan Malayan Management and IFC is the largest global development 5.29% 50.80% Investment Corp.
Slide 29: Comprehensive and Diversified Business Platform
Comprehensive and Diversified Business Platform RCBC RCBC RCBC Capital Rizal RCBC Forex Brokers International Corporation Microbank Leasing Corporation Finance1 99.96% 98.03% 99.67% 100% 100% RCBC Securities RCBC RCBC Corporation Rental Investment Ltd 99.96% 99.67% 100% RCBC Bankard Services Corpora
Slide 30: Investment Information
Investment Information Equity Profile Dividend History1 Credit Rating Dividends Pay-out Particulars 1H 2022 Year per share ratio Ticker RCB 2022 0.62 20.00% Long Term Deposit Baa3 Outstanding Senior Unsecured Baa3 2,037.48M 2021 0.49 19.96% shares Baseline Credit Stock Price PhP 19.38 2020 0.56 20.0
Slide 31: Appendix
Investor Presentation 1Q 2022 4 Appendix 32
Slide 32: Consolidated Income Statement
Consolidated Income Statement 1H 2022 1H 2021 Change % Change Interest Income 20,749 17,662 3,087 17.5% Interest Expense 4,763 4,079 685 16.8% Net Interest Income 15,986 13,583 2,403 17.7% Other Income 5,245 3,534 1,712 48.4% Trading Gains and Forex (9) 128 (137) (107.2%) Trust Fees 205 188 17 9.3%
Slide 33: Consolidated Balance Sheet
Consolidated Balance Sheet Jun 2022 Jun 2021 Change % Change Cash/Due from BSP & Other Banks 148,316 123,796 24,520 19.8% Investment Securities 283,354 177,821 105,533 59.3% Loans (net of Interbank) 516,014 497,851 18,163 3.7% Other Assets 55,621 46,350 9,271 20.0% TOTAL ASSETS 1,003,305 845,818 157
Slide 34: Historical Consolidated Income Statement
Historical Consolidated Income Statement 2018 2019 2020 2021 1H 2022 Net Interest Income 20.5 22.4 26.3 28.8 16.0 Other Income 6.0 13.5 11.6 7.6 5.2 Gross Income 26.5 35.9 37.9 36.4 21.2 Impairment Losses 1.9 7.4 9.4 6.0 1.9 Income before Operating Expenses 24.6 28.5 28.5 30.3 19.4 Operating Expense
Slide 35: Historical Consolidated Balance Sheet
Historical Consolidated Balance Sheet 2018 2019 2020 2021 Jun 2022 Cash/Due from BSP/Due from Other Banks 94 123 148 157 148 Loans Arising From REPO 10 6 13 12 23 FVPL/FVTCI 30 60 45 56 62 Held to Maturity Investments 89 101 43 164 221 Interbank Loans and Receivables 10 19 43 31 9 Loans (net) 389 43
Slide 36: Historical Key Financial Indicators
Historical Key Financial Indicators 2018 2019 2020 2021 Jun 2022 Return on Average Capital Funds* 5.8% 6.5% 5.5% 6.7% 9.5% Return on Average Assets* 0.7% 0.8% 0.7% 0.8% 1.1% Net Interest Margin* 4.0% 4.0% 4.3% 4.1% 4.0% Cost-to-Income Ratio 73.2% 60.8% 58.2% 61.9% 57.6% CASA to Total Deposits 54.4%
Slide 37: Thank you.
Thank you. Investor Presentation 1H 2022 39
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