Morgan Stanley upgrades RCBC ESG rating

RIZAL Commercial Banking Corp. (RCBC) is now among the top 50 banks across the world based on the latest report by the Morgan Stanley Capital International (MSCI).

The Yuchengco-led bank said in a recent statement that it was given a “leader” ranking by Morgan Stanley, which is equivalent to “AA,” in its recent Environmental, Social and Governance (ESG) Ratings report. This is an upgrade from an “A” rating or “average” ranking in 2019.

The improvement in rating placed the bank at the top globally out of the 192 financial institutions reviewed under the MSCI rating system.

Citing the MSCI report, RCBC said that the upgraded rating was supported by its “robust consumer protection programs, sound data privacy and security measures, training of employees in the proper handling of data to preempt risks, and its strong endeavors to attract and retain talent formed part of the reasons for the rating upgrade.”

The ESG metric focuses on six key areas, including financing environmental impact, governance, access to finance, privacy and data security, human capital development, and consumer financial protection.

The Yuchengco-led bank also noted that it received the highest ESG rating of “AA” among its global peers in the same benchmark, outpacing China Construction Bank Corporation, JP Morgan Chase & Co., China Merchants Bank Co. Ltd., Bank of America Corporation, and Industrial and Commercial Bank of China Limited.

RCBC Chief Risk Officer and Risk Management Group Head Juan Gabriel R. Tomas IV said the rating upgrade shows that the bank has remained steadfast in protecting its customers.

“RCBC will continuously improve systems and processes to ensure the highest level of security and diligence to help mitigate risks posed on the financial assets of our clients,” Tomas added.

In January to September 2020, the bank saw its net income slide by 11.3 percent to P4 billion from P4.5 billion year-on-year on the back of increased provisions for potential loan losses.

Loan loss buffer for the first nine months of last year stood at P7.22 billion, or 38.6 percent higher than P5.21 billion in 2019 in the same period. This, as its loan portfolio—net of interbank loans—rose by 8.6 percent year-on-year to P445.23 billion for the same period.

As of end-September 2020, bank assets stood at P731 billion. Capitalization for the period reached P99.49 billion, translating to capital adequacy ratio and common equity tier 1 of 15.8 percent and 12.4 percent, respectively.