Rizal Commercial Banking Corporation · PSE:RCB
Rizal Commercial Banking — Q3 2023 Earnings Presentation
31 slides from Rizal Commercial Banking's earnings presentation, Nov 14, 2023
Slide 1: RCBC 3Q 2023 Investor Presentation
RCBC 3Q 2023 Investor Presentation November 14, 2023
Slide 2: Investor Presentation 3Q 2023
Investor Presentation 3Q 2023 01 Economic Outlook 02 RCBC 3Q 2023 Performance 03 General Info 04 Appendix 2
Slide 3: 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 4: Economic Outlook
Economic Outlook Mr. Michael L. Ricafort RCBC Chief Economist
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 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 6: 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 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 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 8: 9M 2023 Performance
9M 2023 Performance Ms. Chrissy P. Alvarez
Slide 9: 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 10: 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 11: 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 12: 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 13: 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 14: 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 15: 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 16: Maintained dominance in digital space
Maintained dominance in digital space 20
Slide 17: 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 18: 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 22
Slide 19: SATC receives stage 3 approval from BSP
SATC receives stage 3 approval from BSP In November 2022, RCBC’s Board approved the spin- off of its Trust business into a SATC. The spin-off is subject to regulatory approval and licenses. On October 10, 2023, RCBC Trust Corporation received its Certificate of Authority to Operate from BSP and is n
Slide 20: 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 21: General Information
General Information
Slide 22: 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 23: Investment Information
Investment Information Equity Profile Dividend History1 Credit Rating Dividends Pay-out Particulars 3Q 2023 Year per share ratio Ticker RCB 2023 1.08 19.93% Long Term Deposit Baa3 Outstanding Senior Unsecured Baa3 2,419.54M 2022 0.62 20.00% shares Baseline Credit Stock Price 23.4500 2021 0.49 19.96%
Slide 24: 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. 18.7% Pan Malayan Management and Investment Corp. (PMMIC) 33.9% Sumitomo Mitsui Banking Corporation is
Slide 25: Appendix
RCBC Appendix
Slide 26: Consolidated income statement
Consolidated income statement 9M 2023 9M 2022 Change % Change Interest Income 48,011 32,486 15,525 47.8% Interest Expense 23,765 8,532 15,234 178.5% Net Interest Income 24,246 23,955 291 1.2% Other Income 11,706 10,641 1,066 10.0% Trading Gains and Forex 909 230 678 294.7% Trust Fees 306 303 3 1.0%
Slide 27: Consolidated balance sheet
Consolidated balance sheet 9M 2023 9M 2022 Change % Change Cash/Due from BSP & Other Banks 176,018 127,179 48,839 38.40% Investment Securities 346,500 324,783 21,717 6.69% Loans (net of Interbank) 604,050 539,410 64,640 11.98% Other Assets 73,697 83,058 -9,362 -11.27% TOTAL ASSETS 1,074,430 125,834
Slide 28: Historical consolidated income statement
Historical consolidated income statement 2019 2020 2021 2022 9M 2023 Net Interest Income 22.4 26.3 28.8 31.2 24.2 Other Income 13.5 11.6 7.6 13.2 11.7 Gross Income 35.9 37.9 36.4 44.5 36.0 Impairment Losses 7.4 9.4 6.0 5.7 5.0 Income before Operating Expenses 28.5 28.5 30.3 38.7 31.0 Operating Expen
Slide 29: Historical consolidated balance sheet
Historical consolidated balance sheet 2019 2020 2021 2022 9M 2023 Cash/Due from BSP/Due from Other Banks 123 148 157 181 176 Loans Arising From REPO 6 13 12 9 21 FVPL/FVTCI 60 45 56 122 114 Held to Maturity Investments 101 43 164 252 233 Interbank Loans and Receivables 19 43 31 28 17 Loans (net) 430
Slide 30: Historical key financial indicators
Historical key financial indicators 2019 2020 2021 2022 9M 2023 Return on Average Capital Funds 6.50% 5.50% 6.70% 11.24% 9.85% Return on Average Assets 0.80% 0.70% 0.80% 1.17% 1.06% Net Interest Margin 4.00% 4.30% 4.10% 3.70% 3.38% Cost-to-Income Ratio 60.80% 58.20% 61.90% 56.46% 60.89% CASA to Tota
Slide 31: For more information about RCBC, please contact
For more information about RCBC, please contact Investor_Relations@rcbc.com 46
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