Excellence Beyond Expectations 1 Vision To be the most admired and trusted profitable financial services group providing and adapting to customers’ and the community’s changing needs - for every Filipino worldwide - through innovative products, excellent services and a highly motivated, committed and impassioned team. Mission We are a leading universal bank providing quality Integrated Financial Services that best meet our clients’ needs. We are committed to: Conducting our business with utmost integrity, excellence, and commitment as responsible corporate citizens; and, Providing professional growth opportunities to develop a talented base of officers and employees, and achieving the best returns for our stockholders. 2 RCBC Annual Report 2009 Contents 2 Vision/Mission 4 Financial Highlights 7 Message from the Honorary Chairman 10 Message from the Chairman 12 Message to our Stockholders 15 Economic Environment for the Bank in 2009 17 Operational Highlights 25 Subsidiaries 28 Corporate Governance 32 Corporate Social Responsibility 33 Financial Statements 106 Board of Directors 109 Advisory Board Members 110 Senior Management Committee Members 112 Executive Vice Presidents 113 First Senior Vice Presidents 114 RSB Officers 115 Heads of Subsidiaries 116 Senior Officers 119 RCBC Branches 122 RCBC Savings Bank Branches About the Cover 124 RCBC Subsidiaries and Associates The natural and man-made upheavals of 2009 125 Products and Services revealed the difference between companies that perform, and those that outperform. The former are content to negotiate past a crisis with passable results, like when they narrowly edged themselves past the pitfalls of the global recession; the latter show true resiliency by not just going the distance, but going beyond, giving more than their share and winning everyone that they touch. At RCBC, this is how we perform: by pushing the bounds of our capability to weather global crisis and local calamities, and emerging with a sense of not just having survived, but having triumphed. The growth we achieved during this time is the hard-won fruit of our commitment to render excellence beyond everyone’s expectations. Excellence Beyond Expectations 3 Financial Highlights 2009 2008 2007 For the year (in million pesos except ratios) Operating Earnings 16,154 13,067 13,200 Operating Expenses 9,831 8,976 8,168 Net Income Attributable to Parent Bank's Shareholders 3,328 2,154 3,208 Return on Average Capital Funds 11.95 % 7.40 % 12.43 % Return on Average Assets 1.24 % 0.87 % 1.42 % Net Interest Margin 4.62 % 4.25 % 5.00 % At Year-end (in million pesos except no. of shares) Total Resources 288,516 268,270 239,098 Interest-Earning Assets 242,147 219,746 190,544 Liquid assets1/ 99,358 77,797 104,237 Loans and receivables, net 164,892 164,403 117,195 Investments 69,784 51,105 68,757 Deposits 220,278 196,227 175,929 Net Worth 30,549 27,681 29,332 Paid-in 15,200 16,060 16,060 Surplus, Reserve 9,611 7,903 6,753 Hybrid Perpetual Securities 4,883 4,883 4,883 Others 855 (1,165) 1,636 Number of Common Shares 990,550,835 962,843,035 962,836,871 Per share of Common Stock Net Earnings2/ Basic 3.13 1.72 2.93 Diluted 3.06 1.66 2.84 Book Value (Diluted) 27.27 22.77 24.32 Capital Adequacy Ratio (CAR) 18.47 % 17.30 % 18.70 % Number of Employees 4,409 4,121 3,775 Number of Branches 338 324 303 Number of ATMs 471 380 300 1/- COCI, Due BSP, Due from other banks, FVPL, AFS, Interbank loans 2/- After retroactive effect of 15% stock dividends issued in 2007. 4 RCBC Annual Report 2009 288.52 164.40 164.89 268.27 239.10 223.71 117.20 108.93 30.55 Excellence Beyond Expectations 5 We at RCBC are able to provide an elevated level of performance and service best described overall by the quality of EXCELLENCE. Secretary Alfonso T. Yuchengco Honorary Chairman, RCBC 6 RCBC Annual Report 2009 Message from the Honorary Chairman here is a vital component that enables companies to succeed for decades, and it goes beyond Tmere profit. It involves the implementation of first order values that provide guidance and inspiration to the people throughout the organization. By prioritizing these values ahead of everything else, we at Rizal Commercial Banking Corporation are able to provide an elevated level of performance and service best described overall by the quality of EXCELLENCE. The values that we espouse, together with the rest of the member-companies under the Yuchengco Group, are absolute and enduring. They are our foundational ideologies, designed to not be altered under any circumstances, whether it be an economic downturn, lost business opportunities, or any crisis that we face. They have seen our organization through the good and bad times, and they will continue to see us through as long as we remain committed to perpetuate their spirit. Excellence has been infused so strongly in all our areas of business, and to uphold it, we have to continuously demonstrate outstanding performance not only in terms of competitiveness and market growth, but also in corporate governance and corporate citizenship. We are proud to note that this responsibility is internalized by all the individuals who comprise our organization, from the lowest to the highest rung of the ladder. Values, after all, do not drive our organization; they drive the people within. For 50 years now, we have succeeded not just because of our desire to be at par with the top players in the financial services arena, but rather because we always aim to perform beyond expectations. The more we become passionate about what we do, the more our entrepreneurial spirit is driven along with our desire to continuously grow, take risks, and see our company through to a healthier service culture and a healthier return on investment. Our values and our virtues keep us on track as we continue on our journey toward excellence. The directions and decisions of our present management reinforces my conviction that RCBC is indeed in excellent hands. Once again I thank you, our shareholders, for your continued belief and support. Secretary Alfonso T. Yuchengco Honorary Chairman, RCBC Excellence Beyond Expectations 7 Business Affiliations Secretary Alfonso T. Yuchengco YGC Chairman and RCBC Honorary Chairman GOVERNMENT POSITIONS • YGC Corporate Services, Inc. • Knight Grand Officer of Rizal Under the Administration of Chairman of the Board Presented by the Knights of Rizal President Gloria Macapagal Arroyo • Waseda Institute for Asia Pacific Studies Republic of the Philippines (1998) • Presidential Adviser on Foreign Affairs with Member of the International Advisory Board • Order of the Sacred Treasure, Gold and Silver Cabinet Rank (January 19, 2004 – Present) • Ritsumeikan Asia Pacific University Star, Awarded by His Majesty, The Emperor • Member, Consultative Commission to Propose Member of the Advisory Board of Japan (1993) Revision to the 1987 Constitution • Alliant International University • Outstanding Manilan in Diplomacy (August 2005 - March 2006) (San Francisco, California) City of Manila (1995) • Philippine Permanent Representative to the Member of the Board of Trustees • Outstanding Citizen in the Field of Business United Nations with the rank of Ambassador • University of Alabama City of Manila (1976) (November 2001 – December 2002) Member, International Business Advisory Board • Presidential Special Envoy to Greater China, • Culverhouse College of Commerce & Business NON-GOVERNMENT AWARDS Japan and Korea (2001) Administration • Philconsa Maharlika Award • University of San Francisco, Presented by the Philippine Constitution Under the Administration of (Mclaren School of Business) USA Association (2010) President Joseph Ejercito Estrada Member, International Board of Trustees • Hall of Fame Awardee, Far Eastern University • Presidential Assistant on APEC Matter with • Columbia University, Business School, (December 13, 2003) Cabinet Rank (1998-2000) New York, USA • Outstanding Alumni Awardee, Far Eastern Member, Board of Overseers University (May 2003) Under the Administration of • Master of Business Administration (MBA) • Lifetime Achievement Award President Fidel V. Ramos • Juris Doctor (JD) dual degree program of Dr. Jose P. Rizal Awards for Excellence • Ambassador Extraordinary & Plenipotentiary De La Salle University Professional Schools Inc. (June 2002) of the Republic of the Philippines to Japan Graduate School of Business and Far Eastern • KNP Pillar Award (1995-1998) University Institute of Law Kaluyagan Nen Palaris, Pangasinan • Chairman, Council of Private Sector Advisers Chairman of the Board (December 2006) to the Philippine Government on the Spratly • University of St. La Salle, Roxas City • Parangal San Mateo, Philippine Institute of Issue (Marine and Archipelagic Development Member, Board of Trustees Certified Public Accountants Foundation, Inc. Policy Task Group) (1995-1998) • Pacific Forum, Honolulu, Hawaii (October 2001) • Member, Philippine Centennial Commission Member, Board of Governors • The Outstanding Filipino Awardee TOFIL 2000 (1998) • International Insurance Society (IIS) • Gold Medallion, Confederation of Asia-Pacific Member of the Board of Directors and Former Chambers of Commerce & Industry (CACCI) Under the Administration of Chairman of the Board (2000) President Corazon C. Aquino • Philippine Ambassadors Foundation, Inc. • First Asean to be Elected to the “Insurance Hall of • Ambassador Extraordinary & Plenipotentiary of Chairman & Member of the Board of Governors Fame”, International Insurance Society, Inc. the Republic of the Philippines to the People’s •