Rizal Commercial Banking Corporation · PSE:RCB
Rizal Commercial Banking — Q1 2020 Earnings Presentation
34 slides from Rizal Commercial Banking's earnings presentation, 2020
Slide 1: Investor Presentation 1Q 2020
Investor Presentation 1Q 2020
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: Table of Contents
Table of Contents 1 Introducing RCBC 2 Economic Overview 3 Financial Overview 4 Strategic Initiatives 5 Recognition 6 Appendix - Financial Information 3
Slide 4: 1. Introducing RCBC
Investor Presentation 1Q 2020 1. Introducing RCBC 4
Slide 5: RCBC is a leading financial services provider in the Philippines
RCBC is a leading financial services provider in the Philippines Incorporated in 1960, RCBC is the 8th largest private domestic bank in the Philippines by assets, with a market capitalization of Php33.10bn (USD0.65bn)1 and share price of Php17.102 . Member of the Yuchengco Group of Companies (YGC).
Slide 6: Investment Information
Investment Information Dividends Particulars 1Q 2020 Year Pay-out ratio per share Long Term Baa2 Ticker RCB 2019 0.45 17.02% Deposit Issued shares 1,935.63mn 2018 0.62 20.02% Long Term IDR - Stock Price 17.10 2017 0.55 16.53% Senior Php 33.10bn Baa2 Market Cap 2016 0.72 20.00% Unsecured ( USD0.65bn
Slide 7: 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 wid
Slide 8: Ownership Structure
Ownership Structure Cathay Life Insurance Pan Malayan Management and 23.35% Investment Corp. (PMMIC) & Affiliates of the Yuchengco Group of Companies (YGC) 52.43% International Finance Corporation 5.58% Public Float 18.64% 8
Slide 9: Comprehensive and Diversified Business Platform
Comprehensive and Diversified Business Platform RCBC Forex Brokers RCBC Capital Rizal Micro Bank RCBC Leasing RCBC Intl Finance Corporation Corporation Microfinance Thrift Leasing Hong Kong Financing Foreign Exchange Investment Bank Bank Company Company Broker RCBC Rental RCBC Investment Ltd RCBC Se
Slide 10: Key Milestones
Key Milestones 1960-1970s 1980-1990s 2000s 2010s 2011 September 1960 1985 2000 Formed alliances with IFC and CVC Capital Partners RCBC was Continental Illinois Bank Acquired 67% stake in Formed Bancassurance partnership with Sunlife GREPA incorporated and sold its shareholding to UFJ Banka
Slide 11: RCBC has a broad, nationwide branch network
RCBC has a broad, nationwide branch network Branch distribution by Region December 2019 CAR I: Ilocos 3 16 8 II: Cagayan Valley Region III: Central 41 IV-A: Calabarzon Luzon NCR: Metro Manila 200 84 7 V: Bicol Region IV-B: Mimaropa VIII: VI: 6 Eastern Western Visayas 6 Visayas 26 30 VII: Central Vis
Slide 12: 2. Economic Overview
Investor Presentation 1Q 2020 2. Economic Overview 12
Slide 13: Recession likely due to COVID-19 Pandemic
Recession likely due to COVID-19 Pandemic Several industries hard-hit such as Travel & Services FORECAST • Philippine growth constrained in view Philippine of the stringent quarantine measures GDP growth rate to contain the COVID-19 outbreak. -2 to -4% • 1Q 2020 GDP contracted by -0.2%, From usual +
Slide 14: 1Q 2020 GDP growth contracted by -0.2%, the first contraction since 1998
1Q 2020 GDP growth contracted by -0.2%, the first contraction since 1998 % of GDP 1Q 2020 1Q 2019 Contribution Difference to the -0.2% Latest GDP growth contraction GDP Growth was largely brought about by: GDP Growth 100.0% -0.2% 5.7% -5.9% • Disruptions/shutdowns in GDP by Expenditure Shares produc
Slide 15: 3. Financial Overview
Investor Presentation 1Q 2020 3. Financial Overview 15
Slide 16: RCBC Net Income Sustains Its Strong Momentum
RCBC Net Income Sustains Its Strong Momentum Amounts in PHP Millions *On May 27, 2019, the RCBC Board approved the Bank’s request to exercise its call option and redeem its P10,000 5.375% Tier 2 Notes. The request was subsequently approved by the Monetary Board on July 25, 2019, subject to complianc
Slide 17: Historical Financial Performance
Historical Financial Performance Amounts in PHP Billions OPERATING EFFICIENCY PROFITABILITY 30 76.1% 70.9% 73.2% 60.7% 100% 55.6% 80% 60% 20 40% 20% 6 0% 11.1% 20% 21.8 -20% 6.4% 6.7% 5.8% 6.5% 10 17.4 17.8 19.4 -40% -60% 0 5.6 -80% -100% 5 0% 2016 2017 2018 2019 1Q20 4 -20% Operating Expenses Cost-
Slide 18: Consolidated Income Statement
Consolidated Income Statement Amounts in PHP Millions 1Q20 1Q19 Change % Change Interest Income 9,512 9,083 429 4.7% Interest Expense 3,212 3,796 (584) -15.4% Net Interest Income 6,300 5,288 1,013 19.2% Other Income 3,693 2,859 834 29.2% Trading Gains and Forex 2,451 1,446 1,005 69.5% Trust Fees 70
Slide 19: Income growth driven by trading gains and loan book expansion
Income growth driven by trading gains and loan book expansion Amounts in PHP Millions GROSS INCOME Diversified and high quality 1Q20 Net Interest Income Other Income loan portfolio 0% Consumer 1Q19 20% 31% Corporate 0% 451B 53% 13% 3,693 30% 386B 55% SME 19% 16% 2,859 15% 26% 29% Trading & FX gains
Slide 20: Consolidated Balance Sheet
Consolidated Balance Sheet Amounts in PHP Millions 1Q20 1Q19 Change % Change Cash/Due from BSP & Other Banks 88,790 88,192 598 0.7% Investment Securities 97,570 140,181 (42,611) -30.4% Loans (net of Interbank) 448,421 385,052 63,369 16.5% Other Assets 80,541 51,302 29,239 57.0% TOTAL ASSETS 715,322
Slide 21: Consolidated Key Financial Indicators
Consolidated Key Financial Indicators Amounts in PHP Millions 1Q20 1Q19 Change UKB Industry PROFITABILITY Annualized ROE 11.1% 6.4% 4.7% 10.6% Annualized ROA 1.3% 0.8% 0.5% 1.3% Net Interest Margin 4.2% 3.8% 0.4% 3.5% COST EFFICIENCY Cost-to-Income Ratio 55.6% 64.2% -8.6% 58.4% ASSET QUALITY Net NPL
Slide 22: 4. Strategic Initiatives
Investor Presentation 1Q 2020 4. Strategic Initiatives 22
Slide 23: High proportion of low-cost deposits, to be boosted by cash management initiatives
High proportion of low-cost deposits, to be boosted by cash management initiatives • The Bank has a diversified depositor base, from 488 457 both the retail and corporate segments. 423 388 353 • Moving forward, the bank will continue to focus on 226 207 building its customer base by improving our sa
Slide 24: Well-diversified loan portfolio, driven by the consumer segment
Well-diversified loan portfolio, driven by the consumer segment Total Customer Loans In Php Billion 434 451 • The Bank will continue to forge strategic partnerships 389 1 with major car dealerships and real estate developers 353 1 to support consumer loan growth 1 32 305 1 30 22 1 16 90 101 106 • RC
Slide 25: Diverse and Stable fee-based revenue
Diverse and Stable fee-based revenue Fee Income In Php Million Fee Income Growth Strategy 3,759 4,175 3,490 3,417 3,601 Retail Banking: Build a large mass affluent client base, including prepaid (MyWallet) and payroll 964 customers, and increase no. of transactions such as payment (i.e. bills) and p
Slide 26: RCBC is commencing its Digital Transformation
RCBC is commencing its Digital Transformation Transformation centered on creating delightful customer experiences Dedicated and world-class Data Science Provides clients with digital cash Continuous enhancements and team, enabling RCBC to leverage on management solutions for their various improvemen
Slide 27: The Bank is a leader in Green and Sustainable Finance
The Bank is a leader in Green and Sustainable Finance • RCBC is the first Philippine universal bank to issue ESG rating green and sustainable financing instruments under A global standards RCBC Sustainable Loan Portfolio RCBC Sustainability Bond 31 March 2020 Php8B ($160M) Socioeconomic Sustainable
Slide 28: 5. Recognition
Investor Presentation 1Q 2020 5. Recognition 28
Slide 29: Recognized by multiple award-giving bodies
Recognized by multiple award-giving bodies Best Commercial Bank in the Best SME Bank - 2018 Best Card Offering-Philippines - Syndicated Loan of the Year – Philippines - 2017 Best for Credit Derivatives - 2016 2018 RCBC Capital Best Banking Group in the Best Market Coverage –2016 Philippines - 2017 B
Slide 30: 6. Appendix
Investor Presentation 1Q 2020 6. Appendix
Slide 31: Consolidated Income Statement
Consolidated Income Statement Amounts in PHP Billions 2016 2017 2018 2019 1Q20 Net Interest Income 15.71 18.02 20.49 22.37 6.30 Total Non Interest Income 7.11 7.10 6.01 13.49 3.69 Gross Income 22.82 25.12 26.50 35.86 9.99 Provision for Loan Losses 1.77 2.16 1.90 7.40 1.60 Income before Operating Exp
Slide 32: Consolidated Balance Sheet
Consolidated Balance Sheet Amounts in PHP Billions 2016 2017 2018 2019 1Q20 Cash/Due from BSP/Due from Other Banks 107 93 94 123 89 Loans Arising From REPO 8 10 10 6 31 FVPL/FVTCI 24 13 30 60 70 Held to Maturity Investments 52 60 89 101 28 Interbank Loans Receivables 0.5 0.0 9.5 18.8 21.8 Loans-net
Slide 33: Key Financial Ratios
Key Financial Ratios 2016 2017 2018 2019 1Q20 Return on Average Capital Funds 6.4% 6.7% 5.8% 6.5% 11.1% Return on Average Assets 0.8% 0.8% 0.7% 0.8% 1.3% Net Interest Margin 4.1% 4.3% 4.0% 4.0% 4.2% Cost-to-Income Ratio 76.1% 70.9% 73.2% 60.7% 55.6% CASA to Total Deposits 58.1% 55.9% 54.4% 54.7% 53.
Slide 34: Thank you.
RCBC Thank you.
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