Rizal Commercial Banking Corp. (RCBC), the banking arm of the Yuchengco Group of Companies, reported a net income of P4.11 billion for the first half of the year, as earnings were affected by increased loan loss provisions despite continued strength in its core businesses.

"Net profit was impacted by credit impairment provisions in response to heightened geopolitical uncertainties. Despite these headwinds, the bank's core business sustained its momentum," RCBC said in a disclosure to the stock exchange on Thursday. The bank's full financial statement was unavailable as of press time. The higher provisioning aligns with a broader trend among Philippine banks that have been building buffer cushions against potential credit risks stemming from global economic volatility.

"We are navigating a complex and shifting macroeconomic landscape," said RCBC President and Chief Executive Officer Reginaldo B. Cariaso. "However, we have been building up our defenses, strengthening our balance sheet, and pursuing measured portfolio growth to protect, scale, and elevate the strong franchise that is RCBC."

Gross income rose 11.6% year on year to P33.91 billion in the first half, driven by an 18.2% increase in net interest income. The bank's net interest margin stood at 5.1% as of end-June, supported by what it described as "strategic loan expansion and improved funding efficiency." Philippine banks have broadly benefited from sustained lending demand as the economy continues to grow, with the Bangko Sentral ng Pilipinas (BSP) having begun its monetary easing cycle in August 2024.

Continued cost discipline brought the cost-to-income ratio down to 53.6%, RCBC added.

Customer loans grew 9% year on year to P806 billion as of June, with the consumer loan book expanding 22% to P402.4 billion. The outsized consumer loan growth — more than double the pace of overall lending — highlights retail banking as a key growth engine for the bank.

"This reflects the bank's data analytics capabilities and key strategic partnerships, enabling targeted customer acquisition. RCBC continued to pursue selective portfolio growth through prudent underwriting and risk selection," the bank said.

On the funding side, total deposits reached P1.06 trillion. RCBC's total assets stood at P1.42 trillion as of June, while total capital was P150.84 billion. The bank's capital adequacy ratio was 13.4%, well above the BSP's regulatory minimum of 10%.

As of end-June, RCBC operated a network of 471 RCBC and RCBC Microbank branches, 1,518 RCBC automated teller machines (ATMs), and 5,086 ATM Go terminals.

The bank's shares rose by 10 centavos, or 0.44%, to close at P23 each on Thursday.

— A.M.C. Sy