Building Partnerships to Last a Lifetime Rcbc Annnual & Sustainability Report 2020
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2020 BUILDING ANNUAL partnerships REPORT to last a lifetime BUILDING PARTNERSHIPS TO LAST A LIFETIME RCBC ANNNUAL & SUSTAINABILITY REPORT 2020 BUILDING partnerships to last a lifetime OVERVIEW01 02 Our Business at a Glance The COVID-19 global pandemic has changed our view of the present and the future. 04 Message from the Chairperson Some business models may no longer work, while opportunities may arise in new ways 06 Report of the President and CEO of doing things. CONTENTS 10 Financial Highlights In this new milieu, any responsible institution would need to look into the future 14 Business Review through a different set of lenses while remaining focused on goals to build a sustainable world. Our 2020 Annual and Sustainability Report is of unique importance as we take stock of the impact of COVID-19 on our business and our operating environment, as well as on 26 OUR APPROACH TO SUSTAINABILITY our employees, customers, suppliers, and the community. The outbreak has laid bare 28 Our Approach to Sustainability the importance of managing material social risks and opportunities among our key 30 Our Stakeholders stakeholder groups. RCBC’s response in relation to these matters is discussed at length in this report, in addition to our financial, economic, and environmental performance. This 2020 Annual & Sustainability Report was designed in accordance with the following guidelines: ECONOMIC CONTRIBUTIONS • Checklist of Bangko Sentral ng Pilipinas (BSP) Requirements in the Submission of 34 Economic Contributions Financial Audit Report (FAR), Annual Audit Report (AAR) and Reports Required Under Section 7 of Circular No. 410; • BSP Circular 1085 which mandates banks to adopt a Sustainable Finance Framework; ENVIRONMENTAL CONTRIBUTIONS • Sustainability Reporting Guidelines for Publicly Listed Companies under the 52 Environmental Contributions Securities and Exchange Commission Memorandum Circular No. 4 Series of 2019; ABOUT THE THEME and • RCBC’s Sustainable Finance Framework, which articulates our strategy to deploy “A diamond is forever.” The precious Sustainable Financing Instruments to fund loans and projects that have clear SOCIAL CONTRIBUTIONS stone achieves its perfect cut and environmental and/or social benefits. Under this framework, RCBC is required to 64 Social Contributions clarity over the course of time. annually report the allocation and the aggregated impact of the net proceeds of our Eligible Green and Social Portfolio. This will enable investors to see the positive impact of our sustainable financing activities. Much like RCBC. CONTRIBUTING TO SUSTAINABLE DEVELOPment In 2020, the COVID-19 global This report also references the United Nations Sustainable Development Goals (SDGs) pandemic upended lives and wherever applicable. The relationship between the related sections and the SDGs are through our products and services marked with SDG icons throughout the Report. highlighted the interconnectedness 80 RCBC and the UN Sustainable of people and businesses. It took Scope of the Report Development Goals place just when we were celebrating This report’s content and scope are based on our primary business areas and RCBC’s diamond anniversary. sustainability-related initiatives undertaken in RCBC Plaza in Makati City, A.T. Yuchengco Centre in Taguig City, in our subsidiaries and associate offices, and in our Like in many other crises we have 447 branches nationwide between January 1, 2020 and December 31, 2020. While the overcome, we have emerged stronger figures in the employees’ section of the Report are inclusive of our branch personnel, 88 STANDARD SECTIONS than ever, toughened by time, and the Report’s scope does not include the impacts stemming from our overseas 90 Risk Management strengthened by the partnerships we operations, joint ventures, or suppliers. The economic value tables, including audited financial statements, reflect consolidated figures. 150 Corporate Governance have forged. 180 Board of Directors Feedback and Access 186 Senior Management Much like the diamond. As part of our ongoing efforts to engage stakeholders and to improve our reporting performance, RCBC welcomes your feedback. You may reach us at: 194 Senior Officers Our 2020 Annual and Sustainability 202 RCBC Subsidiaries Senior Officers Report chronicles our continuing Email: [email protected] 206 Branch Directory journey to achieve sustainability and Tel.: (632) 8894-9000 222 Rizal MicroBank Branch Directory staying power as a bank that is built to last for a lifetime. An electronic version of this Report is available at: 223 Subsidiaries and Associates https://www.rcbc.com/annual-reports 224 Products and Services 469 Shareholders' Information 239 AUDITED FINANCIAL STATEMENTS 01 BUILDING PARTNERSHIPS TO LAST A LIFETIME RCBC ANNNUAL & SUSTAINABILITY REPORT 2020 Our Business at A Glance Our Business at A Glance • The Asset ESG Corporate Awards: Best Practice Rizal Commercial Banking Corporation (RCBC) started as a • The Asset Asian Awards: Best Issuer for Sustainable Finance development bank in 1960 and grew to become one of the largest universal banks in the Philippines. As of end-2020, it has • The Asset Asian Awards: Best Sustainability Bond total resources of Php772 billion, including its subsidiaries and Philippines affiliates. • Asian Banking & Finance Awards-Wholesale Banking Awards 2020: Philippines Domestic Initiative of the Year for Clientele Base Sustainable Financing As a diversified financial services institution, RCBC serves corporate and individual banking needs, providing a wide range • Global Banking & Finance Review 2020: Best Green Bank of financial services to its customers through its retail and Philippines investment bank, microfinance unit, foreign exchange brokerage • Morgan Stanley Capital International (MSCI) ESG Ratings: house, leasing company and overseas remittance tie-ups. In Upgraded to “AA” rating from “A” — Leader ESG ranking synergy with SunLife GREPA Financials (SLGFI) and Malayan (MSCI ESG ratings of AA and AAA). Insurance Company, Inc. (MICO), RCBC also offers investment- • Annual Alpha Southeast Asia Best FI Awards: Best Digital linked life insurance products, auto, fire, personal accident, and Bank in the Philippines other non-life insurance products. • Asiamoney: Best Digital Bank in the Philippines Delivery Channels • The Global Economics Limited: Most Innovative Internet RCBC has an extensive network of 447 branches and operates Banking Service Provider from its corporate headquarters in Makati City, Philippines. In • CFA Society Philippines: Best Managed Peso Balanced Fund addition to its strategic branch locations, its traditional delivery channel, the Bank serves customers via its 1,426 ATMs all over • Association of Marketing and Communications Professional the country, through the internet, and mobile banking (IOS and (AMCP): Platinum for Creative Effectiveness and Gold in android applications). Digital Marketing • Triple A Asia Infrastructure Awards 2020: Transport Deal of It also serves the country’s microenterprise and small business the Year operators, as well as value chain players in the agricultural sector, through its microfinance arm, Rizal MicroBank, which • 11th Annual Trailblazer Summit and Awards: Best Credit Card Initiative in Asia operates in key areas in Luzon, Visayas and Mindanao with a total of 16 branches and two micro-banking offices. • The Asset Country Awards: Best Capital Bond • 2020 Global Retail Banking Innovation Summit & Awards: Business Model Winner, Loan Offering of the Year for the Bayanihan Balance RCBC derives its funding from customer deposits, which Conversion Program account for nearly 69.4% of its total resources. This is supported by other borrowings at 17.5% and capital at 13.1%. Its main source • 2020 Global Retail Banking Innovation Summit & Awards: of revenue is from its lending business, which account for 63.6% Winner, Best CSR Initiative for the COVID-19 Relief Efforts of total resources. RCBC lends to corporations and individuals. Rewards Donation Program Net interest income comprises 69.3% of its total operating • Retail Banker International Asia Trailblazer Summit and income, while other income accounts for 30.7% of the balance. Awards: Winner, Best Credit Card Initiative The Bank also earns income from other financial services and • Retail Banker International Asia Trailblazer Summit and activities by charging fees or earning commissions, and trading Awards: Best Social Media Marketing Campaign – Highly income from proprietary trading activities. Commended Ownership • Asia-Pacific Enterprise Award: Most Inspirational Brand, RCBC is majority-owned by the Yuchengco Group of Companies Financial Services Category (YGC), one of the oldest and largest conglomerates in • Asia IOT Business Platform: 2020 Enterprise Innovation VISION Southeast Asia covering over 60 businesses. YGC businesses • International Innovation Awards: Best Digital Financial To be the most admired and trusted profitable financial services group providing and adapting to include Malayan Insurance (non-life insurance), SunLifeGREPA Inclusion Initiative customers’ changing needs - for every Filipino worldwide - through innovative products, excellent Financial, Inc. (life insurance joint venture with Sun Life service and a highly motivated, committed and impassioned team. Financial Philippines); EEI Corp. (construction); educational institutions, and vehicle dealerships. Aside from YGC, RCBC’s Corporate Citizenship other significant investors include the World Bank's International