Rizal Commercial Banking Corporation (RCBC) received from Fitch Ratings an upgrade on its Long-Term Issuer Default Rating (IDR), from 'BB' to 'BB+', and on its Viability Rating (VR) from 'bb' to 'bb+'. The bank’s Outlook is also graded as“Stable.”
The upgrade reflects the strong financial standing of RCBC.
The report said that "Fitch believes steady growth in the Philippine economy and enhancements to banking regulations over the last few years has strengthened the domestic operating environment, notwithstanding longstanding structural issues, such as concentrated loan portfolios, developing corporate governance standards and family control and conglomerate ownership of the banks."
The ratings upgrade also reflects the expectation of Fitch of "broadly steady asset quality, adequate capital buffers and stable funding and liquidity profiles."
Fitch likewise said it expects continued economic improvement and proactive regulatory oversight alongside gradually improving regulatory frameworks to benefit bank’s asset quality and ultimately its credit profile through the cycle.
As of end-2015, RCBC's Asset quality was at its record best, 0.79% Net Non-Performing Loan (NPL) ratio and NPL cover of 102%. In terms of Capital Adequacy, the Bank's CET 1 ratio was 12.55%, 4.0% more than the regulatory minimum of 8.5%. The Capital Adequacy Ratio was 15.72%, or 5.72% higher than the 10% regulatory minimum. Total capital remained strong at P 58.13 billion, bolstered by the P7 Bln capital infusion of Cathay in April 2015. Total resources reached P 516.1 Billion with Total deposits at P 342 Billion (65% or P 222 Billion are low-costing CASA deposits) and Loans at P 299 billion (14% growth) as average loan volume of the corporate segment grew by 18%, consumer by 17% and SME by 24%.
As of June 2016, the bank had 477 branches and 1,443 ATMs, or an ATM to branch ratio of 3.03 to service its clients across the country.
The Bank's Stable Outlook from Fitch is an expectation that the bank's financial profile will remain steady over the near to medium-term. Continued economic growth, a relatively conservative regulatory environment and a liquid banking system backed by a growing middleclass population and strong remittances from overseas workers will support the bank’s rating profile.