About Our Report - RCBC

05About RCBCCorporate and COMMERCIAL AwardsOverviewSustainabilityStandard SectionsFinancialsSustainability Awards Best Cash Management Bank in the Philippines by Global Banking & FinanceReview Awards Top Community Centric Companies in Asia by Asia Corporate Excellence &Sustainability Awards 2021 Renewable Energy Deal of the Year WIND under Vietnam, Best Deals ASEANby The Asset Infrastructure Awards The Asset Benchmarking Award for Excellence in Environmental, Social, andGovernance (ESG) – Gold Award for 2021" by The Asset ESG CorporateAwards Philippines Domestic COVID Management Initiative of the Year by AsianBanking and Finance Most Trusted Brand by Global Brand Best Private Domestic Bank Brand by Global Brand Best SME Banking Brand – Philippines by Global Brand 2021 Outstanding BSP Stakeholders by Bangko Sentral ng Pilipinas Best Sustainability Bond by Asset Publishing and Research LtdMarketing Campaign Awards Best Product Program - RCBC One Account by Bank Marketing Association ofthe Philippines Corporate Excellence Award by Asia Pacific Enterprise Awards Best Program in Social Media - RCBC Christmas in Your Card by BankMarketing Association of the Philippines 2020 Best Fixed Income House - 3rd place by Fund Managers Association ofthe Philippines Inspirational Brand Award by Asia Pacific Enterprise AwardsRetail Awards Mid-sized Domestic Retail Bank of the Year – Philippines by Asian Banking andFinance Best Retail Bank in the Philippines by Retail Banker International TrailblazerAwards Best in Mass Affluent Banking by Retail Banker International Trailblazer Awards Utang ni Tatang Digital Ad Campaign (Gold Anvil) - PR Tool by Anvil Awards Madiskarteng Pilipino: Road to #BuhayAsenso Financial Inclusion CaravanSeries” (Gold Anvil) by Anvil Awards Utang ni Tatang Digital Ad Campaign - PR Program (Silver Anvil) by AnvilAwards Madiskarteng Pilipino music video (Silver Anvil) by Anvil Awards #Ipon Galing: Road to Achieving #IponGoals” promo series (Silver Anvil) byAnvil Awards Christmas In Your Cards - Platinum Award in Digital Marketing by Marcom

06OverviewFinancial HighlightsTOTAL RESOURCESIn billion PhpSustainabilityNET LOANS*In billion Php*Includes Receivables, Net of Interbank LoansTOTAL DEPOSITsNET WORTHNET INCOMEDISTRIBUTION NETWORKIn billion PhpIn billion PhpStandard SectionsIn billion PhpATMsBranchesFinancials

07Message from the ChairpersonOverviewSustainabilityStandard SectionsFinancialsDear shareholders, customers, colleagues, and partners:2021 was a watershed year for the whole world and for RCBCin many respects.RCBC earned a total of 58 awards and recognitions — our besthaul ever.Defying many predictions of a prolonged recession, theglobal economy recovered in 2021. This was driven by strongconsumer spending and investment, with trade surpassing prepandemic levels.To be a formidable player, we must remain a forward-thinkingbank. We should continue to harness technologies that satisfycustomer needs for financial health, wealth, trust, and security,with a new level of online, mobile, and omni-channel services.Mirroring this momentum of growth, the Philippines’ GDPexpanded by 5.7% in 2021 from the previous year’s level. Thanksto the ease of restrictions on pandemic protocols, businessactivity picked up, especially in the fourth quarter. To encouragebanks to lend more, the Bangko Sentral ng Pilipinas (BSP)kept its key policy rate unchanged at 2%, ushering record-lowinterest rates.However, even if we keep on pioneering innovations, a hightech mindset is not enough on its own.While growth remains fragile in many parts of the world, weat RCBC have many reasons to celebrate. Not only did wemark our sixth decade as a financial institution in 2021, butmore importantly, we celebrate the remarkable resilience andresourcefulness we have demonstrated in the past two years ofthe pandemic.Together as one RCBC family, we have faced unprecedentedchallenges. We have shifted to new ways of working andquickly embraced digital platforms. And while many of us wereworking from home for over a year, we still managed to helpour colleagues, our customers, and partners navigate their waythrough the most trying 24 months in our 60-year history.We always believed in our ability to come together for a commonpurpose. When the pandemic started in 2020, no one knew thedepth or the duration of the COVID-19 economic downturn.During the early days of the pandemic, the outlook seemedbleak for businesses around the world. Our response to theseunprecedented challenges has been quick: our ManagementTeam had to make some of the hardest decisions to ensurethe health of our people as well as of our business. We madeprudent and tough decisions on cost control, which meantenjoining everyone to work harder and make some sacrifices.This is why seeing the fruits of all our efforts today fills myheart with deep gratitude. In 2021, we breached the Php7billion mark in net income, climbing by 41% versus year-ago,and making history as our highest ever. Behind these numbersare our pioneering innovations in the digital space, as well as inour various services, that won the hearts of our customers, aswell as those of prestigious award-giving bodies. In 2021 alone,If we fail to meet real needs, wants, and behaviors, ourcustomers will not reward us with loyalty, trust, and support.This is why RCBC heavily invests in data science to ensure thatour innovations remain relevant to every Filipino — helpingthem adapt to the post-pandemic reality, getting everyoneon-boarded into the digital space with ease, performingtransactions faster and more seamlessly.This is why our sustainable future depends on how well wecan leverage the latest innovations to provide future-orientedbanking services that are seamless, inspired, innovative, andloved.Looking ahead, there is no doubt that RCBC, like any otherbusiness, still faces many uncertainties. The economic andgeopolitical environment will remain volatile, especially with theongoing geopolitical tension in Russia and Ukraine, emergingsupply chain bottlenecks, rising commodity prices, and otherpotential headwinds, both locally and globally.To steady our hold, we bank on the impressive agility andremarkable ability to adapt with change which we havedemonstrated during the past two years. Our strong brandreputation, consistent track record of growth, our capabilitiesand culture, and our commitment to sustainability allow us tolook to the future with confidence.On behalf of our Board of Directors, our Senior Managementteam, and our employees, we thank you for the trust andconfidence you have given RCBC throughout these years. Thisemboldens us to continue pursuing innovations that deliver,now and for the succeeding generations.Helen Yuchengco DeeChairperson

08Report of the President and CEOOverviewSustainabilityStandard SectionsFinancialsMAKE IT COUNTWith the ripple effects of the COVID-19 pandemic stillbeing felt in 2021, RCBC continued to navigate the everchanging business and economic landscape to deliveron our purpose and create long-term value for ourstakeholders.Even without the pandemic, our business is already beingdisrupted by rapidly changing customer expectations,increasing regulation, and intensifying competition frombanks, as well as other players such as fintechs and telcos.The unprecedented pandemic, however, brought threethings to light:1. Even the best-laid plans could go awry, as our businessis largely and increasingly being shaped by what’shappening in the world around us, from economic andpolitical developments, to the changing regulatoryenvironment, global trends and social issues;2. Even the worst crisis could open up windows ofopportunities, more so if we are agile, digital, connected,and entrepreneurial; and3. Innovation is no longer optional but has becomeimperative for business to succeed.While these insights are nothing new, they became crystalclear when our very survival — not just as a bank or abusiness, but as a people — was put on the line duringthe pandemic. And because of these insights, we havelearned to cope with the new operating environment in2021 even as we continue to be on the lookout for “blackswans” that could set our efforts back.Inevitably, grappling with uncertainty around us will nowbe a way of life. Thus, we should turn every crisis into achance to serve our customers better with empathy, stayahead of the game, and seize pockets of opportunitiesthat emerge with the rapid changes in our operatingenvironment.StrongerWhile there was still reluctance to lend due to lingeringmarket uncertainty, RCBC found a way to step up tothe plate. We looked at the entire spectrum and sawborrowers from safe-haven sectors that deserve creditassistance during the crisis. Many of these borrowers —from small and medium enterprises to conglomerates —were long-time depositors who have stayed with RCBCthrough generations, through thick or thin. The pandemicgave us the perfect opportunity to reward their trustand loyalty with our partnership so they can survive andthrive.We did not go to battle armed with just noble intentions.Our steadfast determination to serve these sectors camefrom data-driven decisions after identifying the safehavens for growth. This strategy served us in good stead,enabling us to expand our customer base and unlockmore business opportunities.By being there when we were most needed, our clientsrewarded us with their continued patronage.Our consolidated net income rose to an all-time high in2021 — to Php7.08 billion or by 41.2% from Php5.02 billionin 2020. This was spurred by a 71.6% increase in the fourthquarter of 2021 alone to Php1.745 billion from Php1.017billion a year earlier, as lockdown restrictions furthereased, boosting consumer and business confidence andbenefitting our core businesses. Our return on equityimproved to 6.7% from 5.5%, while return on assets wasat 0.84% from 0.68%, year-on-year.Customer loans accelerated at a faster pace than theindustry, by 12.3% to Php512.7 billion, year-on-year. Thisled to a 9.7% growth in net interest income to Php28.83billion, mostly from the corporate segment which roseby 14.6%, and from small- and medium-sized enterpriseswhich grew by 18.6%. Consumer loans also inched up by4.9%.By lending to safe-haven sectors, we managed to keep alid on our nonperforming loans (NPLs) at Php18.32 billion,bringing our NPL ratio to 3.3%. This translated to a 35.5%reduction in the loan loss reserves we needed to set asidein 2021, or to Php6.05 billion from Php9.38 billion, yearon-year.With the rationalization of our branches, our operatingexpenses only slightly increased by 2.2% to Php22.54billion from Php22.05 billion in 2020. We expect ourdigitization process to contribute to further improvementin our cost-to-income ratio in the coming years.Mirroring the double-digit growth in our loan portfolio, ourdeposits rose by an unprecedented 25.5% to Php672.46billion in 2021, stronger than the industry average. Thelevel of investment securities more than doubled whiletotal earning assets expanded by 30.8%, year-on-year.

09Report of the President and CEOOverviewSustainabilityStandard SectionsFinancialsRCBC remained well-capitalized with a capital adequacy ratio and common equity Tier 1ratio of 15.2% and 12.2%, respectively, in 2021. With the Php4.48-billion fresh capitalinfused in RCBC in June 2021 by Sumitomo Mitsui Banking Corp., one of the largestmegabanks in Japan, we plan to ramp up our tech investments, as well as exploreopportunities for synergy and collaboration in key business areas.TrustedOur ability to win in the battle for hearts and minds relies largely on the trust of all ourstakeholders. This is especially true as we become more and more a digital bank.BolderBehind these numbers is a story that needs to be told. It is the story of the Bank’s courageand agility in execution.And at the end of the day, to earn stakeholders’ trust is to harness all our innovations forthe greater good, in support of solving society’s problems.During the pandemic, we have witnessed how consumers quickly embraced newdigital solutions, as shown by the growing demand for online and mobile banking ande-commerce. In a digital society, customers are more engaged, highly empowered, andsometimes meticulous in their choices. Nowadays, the benchmark is a 24/7, frictionlessomnichannel experience when accessing products and services. This customer behavioris now driving the digital ambition of banks. Like RCBC, all banks are now in a race toprovide the best customer experience.But harnessing the latest technology to improve customer experience is not enough. Weneed to build capabilities from within, strengthen our core, and create a new mindset.More than a race to the finish line, it is the persistent pursuit that runs through our DNA.For RCBC, this means driving innovation across our organization, culture and processes.People usually associate innovation with a beautiful mobile app. And to some extent,that is true. What lies beneath, however, is the real test. True beauty is in the value thatthe innovation creates. This was the design thinking when we packed RCBC Digital withthe most powerful features. We needed to perform a lot of back-office reengineering tobecome more efficient and reduce turnaround time. We had to deploy robotic processautomation (RPA) to improve both customer and employee experiences. And afterall is said and done, we always go back to the customer. We spend time asking thecustomer, understanding their needs, immersing ourselves in their situation, deepeningour understanding of their pain points, and ideating potential solutions. Then we testour solutions and go back to the customer again so they can tell us if it works or not.This approach has become a matter of course for us at RCBC.It is important that we deliver banking services that make our customers delighted.At each point, whether at the level of the branch (the Branch of the Future) or on theRCBC Digital, RCBC Online Banking for Corporate, or DiskarTech, our commitment isto innovate for the customer. Banking products, such as RCBC Hexagon Club, RCBCOneAccount, and the recently launched Green Time Deposit, were developed to trulydeliver for our customers. Our customers’ resounding response serves proof of their trustand confidence in our work and the innovative products and services we deliver. The 58awards and recognition we received from prestigious regional and global publicationsand organizations in 2021 are badges we wear proudly for our customers and otherstakeholders. They inspire us to embrace more novel ways of deepening our insightsinto the lives and habits of our retail and corporate customers as we make RCBC thebest in providing exceptional customer experience.To be a trusted financial institution, we must also ensure the integrity of customer dataand their privacy, be operationally resilient, as well as compliant with regulations.We have already shown this at the height of the COVID-19 pandemic when, throughDiskarTech and ATM Go terminals, we led a private sector coalition to ensure the timelydisbursement of Php200 billion in emergency state subsidies to vulnerable households.In 2021, we stepped up on our national contributions to meet the United Nations’Sustainable Development Goals through our pioneering efforts such as issuing ourPhp17.87-billion ASEAN Sustainability Bond, the largest issuance in the Bank’s 61year history. This came after setting a milestone in 2019 with our Php8.00-billionpeso-denominated ASEAN Sustainability Bond, the first to be issued and listed in thePhilippines in compliance with the SEC’s guidelines and the ASEAN Sustainability BondStandard.We are also determined to lead the charge in sustainable financing in the country andhave grown our total eligible sustainable portfolio by 28.5% to Php67.03 billion in 2021from the year-ago level of Php52.17 billion. Of the total eligible sustainable portfolio,renewable energy and energy efficiency projects accounted for 60.0% from 49.4% in2020.ForwardRCBC’s journey towards being a sustainable business, a leading innovator, and a strongpartner for generations, however, is far from over. While we expect 2022 to be a betteryear overall for the Philippine economy, there will be headwinds that we will need toovercome. Time and again, we have proven that our success is only made possiblebecause we have steady and true partners in our journey — each and every RCBC Bankerworking to make things happen, our customers and our shareholders who have trustedus through generations, and our leaders and our Board of Directors for the purposefulcollaboration and teamwork.The challenges we have all experienced in the past two years of the pandemic make ourperformance in 2021 all the more meaningful. Let us continue to make it count for everyFilipino, to whom we have made a commitment to serve, wherever they are in the world.Eugene S. AcevedoPresident and CEO

10Business ReviewOverviewSustainabilityStandard SectionsFinancialsDigital Acceleration“Rizal Commercial Banking Corporation’s strategy of using its digitalprowess to do good in the Philippines is what captures Asiamoney’sattention the most this year.”Asiamoney, in hailing RCBC as the “Philippines’ Best Digital Bank 2021”RCBC CONTINUES TO DRIVE DIGITALTRANSFORMATION BY ROLLING OUTNEW DIGITAL INITIATIVES AND SYSTEMENHANCEMENTS SO CUSTOMERS CANMEET THEIR BANKING NEEDS 24/7,WHEREVER THEY ARE.

11OverviewBusiness ReviewIn 2021, we further upgraded the RCBC Digital app by packing it with over20 digital features, making it among the most comprehensive and powerfulbanking apps in the market today. These features allow our customers to meettheir various financial needs such as building their personal wealth throughUITF investments and foreign exchange services, as well as managing theirpersonal finances conveniently through fund transfer, check deposit, billspayment, reloading their cellular phone data, among others.We also launched a fully digital, onboarding platform that enables our clientsto open a deposit acco

Best Financial Inclusion Program - RCBC Diskartech by Bank Marketing Association of the Philippines Covid Response Innovations (Runner up) - RCBC One Account by Infosys Finacle Innovation Awards Best Customer Loyalty Program - Hexagon Club by International Finance 04 About RCBC Overview Sustainability Standard Sections Financials