RCBC, EastWest post lower profits in Q1

ABS-CBN News

Posted at May 08 2014 11:49 AM | Updated as of May 08 2014 07:49 PM

MANILA, Philippines - Rizal Commercial Banking Corporation and EastWest Bank reported lower profits in the first quarter of 2014.

In a statement, RCBC said its unaudited consolidated net income fell 25% to P1.33 billion in the January to March period, from P1.77 billion a year ago.

RCBC said gross revenues excluding trading gains went up 11.4% to P5 billion.

The bank reported its net interest income rose 26% to P3.84 billion in the first quarter, while loans expanded by 24% to P245.4 billion. The NPL Ratio of the parent bank stood at 0.54%, while consolidated NPL Ratio at 1.08%.

Total deposits grew by 30% to P300.2 billion, while total consolidated resources grew by 13.54% to P417.08 billion.

"During the first quarter last year, we took advantage of the favorable trading opportunities which led to hefty trading gains for the Bank. This year, financial market conditions have reversed, a stricter capital adequacy regulation under Basel 3 is in place, and competition continues to be at a heightened pace. We anticipated all these early on which made us focus on our key strengths: lending and deposit-taking," said RCBC President & CEO Lorenzo V. Tan.

Meanwhile, EastWest Bank reported a 38 percent decline in its net income to P455.7 million, due to a P756 million drop in trading income.

However, EastWest said its lower trading revenues were offset by the strong gains on its core banking businesses for the first quarter of 2014.

Customer loans rose 37.1% to end the first quarter at P102 billion, driven by double-digit growth in corporate and consumer lending. Total deposits jumped 42% to P122.9 billion in the January to March period.

"We are happy and thankful to note that core revenues are growing faster than we initially expected. This is most helpful to offset the costs of expansion and lower trading revenues. This is not a year for trading. Interest should go a bit higher and volatility will be a little more pronounced as the world economy recovers and the Philippines sustains its growth momentum. Fortunately, we have good core banking businesses. Overall, we still think business will be good in the coming years," said EastWest President and CEO Antonio C. Moncupa, Jr. in a statement.