RCBC expects income boost from BSP easing move
RIZAL COMMERCIAL Banking Corp. (RCBC) expects to post net income growth for the rest of the year on the back of better margins as the Bangko Sentral ng Pilipinas (BSP) continues to cut benchmark interest rates.
“The consumer portfolio is a long portfolio. You fix the portfolio for five to 15 years, so when rates come down, the spreads widen on a oneto-one basis. Our portfolio is more long-term fixed. We were able to book a lot when interest rates were high, so we should be able to enjoy the lower funding costs,” RCBC President and
Chief Executive Officer Eugene S. Acevedo told reporters on the sidelines of the Yuchengco Group of Companies Forum 2024 on Thursday.
“Our funding base is 50-50 low cost, high cost. So, whenever interest rates are high, our margins shrink compared to the big banks. But when interest rates start coming down, the margins start widening,” he added.
RCBC’s net income declined by 12.97% year on year to P2.25 billion in the second quarter due to increased tax expenses. In the first half, its net profit stood at P4.45 billion, 28.47% lower than the P6.22 billion booked in the same period last year.
The BSP’s policy-setting Monetary Board on Aug. 15 slashed its policy rate by 25 basis points (bps) to 6.25% from a near 17-year high of 6.5%, marking its first easing move in nearly four years.
BSP Governor Eli M. Remolona, Jr. has said they could cut rates by another 25 bps within the year. The Monetary Board’s remaining policy-setting meetings this year are on Oct. 17 and Dec. 19.