RCBC strengthens balance sheet for tougher economic conditions

Insider Spotlight

• RCBC cuts investment risk ahead of economic uncertainty
• The bank tightens lending and strengthens the funding position
• CEO flags pressure on SME loan portfolio
  
  
  

Rizal Commercial Banking Corp. (RCBC) has shortened the duration of its investment portfolio, tightened lending to higher-risk segments, and secured funding at favorable rates as it prepares for tougher economic conditions.

The measures, outlined by RCBC president and CEO Reginaldo Anthony B. Cariaso during the bank's 2026 Annual Stockholders' Meeting on Monday, are intended to strengthen the bank's financial position amid expectations of a more volatile interest rate and credit environment.

The big picture

"My objective remains the same – to protect, scale, and elevate the strong franchise that is RCBC," Cariaso said.

Cariaso said the bank reduced the average duration of its investment securities portfolio from 7.3 years in 2021 to 3.5 years as of the first quarter of 2026, providing a buffer against the impact of projected interest rate changes.

The bank also reduced credit lines in higher-risk segments and introduced the CARE Program, an analytics-driven collections initiative for auto and housing loan clients designed to engage customers before they encounter financial stress.

Why it matters

RCBC also locked in favorable borrowing costs through three capital market issuances before interest rates tightened. These included $350 million in offshore sustainability notes at 5.375 percent in January 2025, P12.21 billion in Series F ASEAN Sustainability Bonds in July 2025, and P20.5 billion in Series G bonds at 6.08 percent in April 2026.

Cariaso said the issuances diversified the bank's funding base while helping lower its cost of funds before market conditions became more challenging.

What's next

RCBC's consolidated gross non-performing loan (NPL) ratio stood at 4.8 percent, while its corporate lending portfolio, the bank's largest segment, posted a gross NPL ratio of 2.7 percent. Cariaso said consumer NPLs remained below the industry average, although the bank is overhauling its small and medium enterprise portfolio to address higher bad loans.

"We are navigating a complex and shifting macroeconomic landscape. However, we have been building up our defenses, locking in strategic wins, and fundamentally reshaping our balance sheet to drive sustainable, high-quality growth," Cariaso said. —Princess Daisy C. Ominga | Ed: Corrie S. Narisma