Notice to Stockholder Pre Emptive Right - PDF

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					- page 2 -

                                    GENERAL INFORMATION

Date, time and place of meeting of security holder and mailing address

a. date, time and place of the meeting             :        June 28, 2010
                                                            4:00 p.m.

                                                            47th Floor, Alfonso Sycip
                                                            Executive Lounge
                                                            RCBC Plaza, Yuchengco Tower
                                                            6819 Ayala Avenue corner
                                                            Sen. Gil J. Puyat Avenue
                                                            Makati City
b. complete mailing address of
   principal office                                :        7/F, RCBC Plaza, Yuchengco Tower
                                                            6819 Ayala Avenue corner
                                                            333 Sen. Gil J. Puyat Avenue
                                                            Makati City

c. approximate date on which the Information Statement
   is first to be sent or given to security holders  :               June 04, 2010

                      WE ARE NOT ASKING YOU FOR A PROXY AND
                   YOU ARE NOT REQUESTED NOT TO SEND US A PROXY

Dissenters’ Right of Appraisal

Among the corporate matters or actions at the above annual meeting to be submitted to the
stockholders of the Bank is the amendment to Article SEVENTH of the Amended Articles of
Incorporation the Bank removing the pre-emptive rights of holders of capital stock, whether
common or preferred, to subscribe for or purchase any shares of any class. The proposed
amendments shall read as follows:

                                                  xxx

        “No holder of Preferred Shares shall be entitled as such to pre-emptive right to purchase
or subscribe to any issue or disposition of shares of any class of the Corporation, whether out of
unissued shares of the capital stock authorized by this Article SEVENTH or otherwise.         (As
amended on May 29, 2006)

         “Holders of Preferred shares shall be given preference over holders of Common Shares in
the (i) distribution of dividends and (ii) distribution of corporate assets in the event of liquidation.
The preference in assets of the holders of Preferred Shares shall be up to the value of the issue
price.


         “The foregoing features of the Preferred Shares shall be printed in the Stock Certificates
to be issued by the Bank.

        “Common stockholders of record at any time when the Corporation offers for subscription
a part or all of its authorized but unsubscribed shares shall have preferential rights as against
- page 3 -

third parties to subscribe for a proportionate share of such shares offered, and in case some of
the existing stockholders do not take up their respective pre-emptive rights, the Board, or
Officers of the Corporation as may be delegated by the Board, shall thereafter allocate the same
proportionately to all the qualified stockholders who are willing to take them up. Thereafter, the
Corporation may offer for subscription a part or all of its authorized but unsubscribed shares to
third parties. This provision shall not apply in case of any public offering of authorized but
unissued shares of the capital stock to raise capital of the Corporation. (As amended on May 29,
2006)

         “Holders of the capital stock, whether common or preferred, shall have no pre-emptive
right to subscribe for or purchase any shares of any class.

         “No liability for damages of any kind shall attach to the Corporation, its Board of Director
or Officers by their refusal to register in the corporate books any issuance, sale or transfer of
shares of stock of the Corporation, whether voluntarily or by operation of law, made in violation
of the restrictions above set forth.

       “The foregoing provisions shall be printed on the Certificates of Stock to be issued by the
Corporation.”
                                               xxx

The amendment to the Article of Incorporation of the Bank removing the pre-emptive rights of
holders of capital stock, whether common or preferred, to subscribe for or purchase any shares
of any class will entitle dissenting stockholders to exercise their right of appraisal as provided in
the Title X of the Corporation Code.

In event a stockholder who shall have voted against the proposed corporate action, the
stockholder may seek payment of the fair value of his shares pursuant to the Title X of the
Corporation Code. In this regard, a written demand must be made by a dissenting stockholder of
the Corporation within thirty (30) days after the vote was taken. Failure to make such demand
within the said period shall be deemed as a waiver of the stockholder’s appraisal right; Provided,
that failure of the dissenting stockholder to submit his certificate/s of stock with the Corporation
(for notation that such dissenting shares) within ten (10) days after his written demand has been
made, shall likewise be deemed as a waiver of his rights. Upon payment of the value of his
shares, the dissenting stockholder shall forthwith transfer his shares to the Corporation.
However, no payment shall be made to any dissenting stockholder unless the Corporation has
unrestricted retained earnings in its books to cover such payment.

No other matters will be presented for shareholders’ approval during the annual stockholders’
meeting that may occasion the exercise of the right of appraisal.

Interest of Certain Persons in Matters to be Acted Upon

No director or officer of the Corporation and, to the best knowledge of the Corporation, no
associate of a director or officer of the Corporation has any substantial interest, direct or indirect,
by security holdings or otherwise, in any of the corporate actions to be acted upon at the Annual
Meeting of Stockholders. None of the directors of the Corporation has informed the Corporation
of his intention to oppose any of the corporate actions to be acted upon at the Annual Meeting of
the Stockholders.
- page 4 -

Moreover, the directors and management of the Bank act in the best interest of shareholders and
there have been no adverse finding of conflict of interest or insider trading involving any
director/management in the past two (2) years.


                      CONTROL AND COMPENSATION INFORMATION

Voting Securities

As of April 30, 2010, 940,122,904 Common shares and 2,621,506 Preferred shares are
outstanding, and are entitled to be represented and vote at the Annual Stockholders’ Meeting.
Each share is entitled to one vote.

Record Date

Only stockholders of record as of May 28, 2010 shall be entitled to notice and vote at the
meeting.

Manner of Voting

The By-Laws of the Bank provides that every stockholder entitled to vote shall have the right to
vote in person or by proxy the number of shares of stock standing in his own name in the stock
and transfer books of the Bank at the time the books were closed and said stockholder may vote
such number of shares for as many persons as there are directors, or he may cumulate said
shares and give one candidate as many votes as the number of directors to be elected, multiplied
by the number of shares shall equal, or he may distribute them on the same principle among as
many candidates as he shall see fit, Provided, that the whole number of votes cast by him shall
not exceed the number of shares owned by him, as shown in the books of the Bank, multiplied
by the whole number of directors to be elected; and Provided, that no stock declared delinquent
by the Board of Directors for unpaid subscriptions shall be voted.

Security Ownership of Certain Record Owners of more than 5% (as of April 30, 2010)

Title of       Name & Address of            Name of Beneficial       Citizenship      No. of       Percent
 Class         Record Owner and                Owner and                              Shares
               Relationship with            Relationship with
                     Issuer                   Record Owner
Common       Pan               Malayan    Pan            Malayan     Filipino       473,963,630     50.42%
             Management             and   Management         and
             Investment Corp.             Investment       Corp.
             (Major Stockholder of        (PMMIC)*
             RCBC)                        (Major Stockholder of
             48th Floor, RCBC Plaza       RCBC)
             Yuchengco Tower, 6819        *Person Authorized to
             Ayala Avenue corner Gil      Direct the Voting of the
             Puyat Ave., Makati City      Shares: Sec. Alfonso T.
                                          Yuchengco,         Board
                                          Chairman of PMMIC.
Common       PCD Nominee Corporation      PCD Nominee Corporation    Filipino       306,616,631     32.61%
             (Filipino)                   (Filipino)
             G/F, MKSE Bldg.              *Person authorized to
- page 5 -

             (Stockholder of RCBC)          Direct the Voting of the
             Ayala Avenue, Makati City      Shares: Ms. Mary Ann
                                            Malicdem,       Assistant
                                            Manager/     Operations-
                                            PCD Nominee Corp.
Common       PCD Nominee Corporation        PCD Nominee Corporation      Other Alien       72,618,670            7.72%
             G/F, MKSE Bldg.                (Non-Filipino)
             (Non-Filipino)                 *Person Authorized to
             (Stockholder of RCBC)          Direct the Voting of the
             Ayala Avenue, Makati City      Shares: Ms. Mary Ann
                                            Malicdem,           Asst.
                                            Manager/Operations -PCD
                                            Nominee Corp.

The participants under PCD owning more than 5% of the voting securities (common)
are:

             Name                                      Shares                              % of Total
RCBC Securities, Inc.                                106,167,956                                11.30%
RCBC Trust and Investments                            64,690,924                                6.88%
Division


Security Ownership of Certain Record Owners of more than 5% (as of April 30, 2010)

Title of       Name & Address of                  Name of             Citizen-         No. of        Percent
 Class          Record Owner and              Beneficial Owner          ship           Shares
             Relationship with Issuer         and Relationship
                                                with Record
                                                   Owner
Preferred    Antonio     O.    Floirendo,    Antonio O. Floirendo     Filipino         2,148,892         81.97%
             Filipino
             Anflocor Bldg., 411 Quirino
             Ave.     Cor    Naia     Rd
             Paranaque City


Security Ownership of Management (as of April 30, 2010)
a. Board of Directors:

 Title of             Name of Beneficial Owner/                  Amount and Nature       Citizen-    Percent
  Class                       Position                             of Beneficial           ship      of Class
                                                                    Ownership
                                                                     ”r”/”b”*
Common       Alfonso T. Yuchengco        Honorary Chairman/     P39,970.00 “r”            Filipino       0.00%
                                         Director
Common       Helen Y. Dee                Chairperson            P4,380.00 “r”             Filipino       1.77%
                                                                P146,714,780.00 “b”
                                                                P19,238,190.00 “b”
Common       Rizalino S. Navarro         Director               P2,608,660.00 “r”         Filipino       0.03%
Common       Cesar E. A. Virata          Director/Corporate     P1,670 “r”                Filipino       0.00%
                                         Vice-Chairman          P500,000.00 “b”
- page 6 -

 Common       Lorenzo V. Tan                President and CEO     P50.00 “r”           Filipino   0.00%
 Common       Teodoro D. Regala             Director              P10.00 “r”           Filipino   0.00%
                                                                  P20,000.00 “b”
 Common       Wilfrido E. Sanchez           Director              P10.00 “r”           Filipino   0.00%
                                                                  P300,000.00 “b”
 Common       Ma. Celia H. Fernandez-       Director/ Corporate   P180.00 “r”          Filipino   0.00%
              Estavillo                     Secretary
 Common       Reynaldo B. Vea               Director              P10.00 “r”           Filipino   0.00%
 Common       Yvonne S. Yuchengco           Director              P10.00 “r”           Filipino   0.00%
                                                                  P40,000.00 “b”
 Common       Teodoro Q. Pena               Independent           P1,110.00 “r”        Filipino   0.00%
                                            Director              P30,780.00 “b”
 Common       Armando M. Medina             Independent           P1,950.00 “r”        Filipino   0.00%
                                            Director
 Common       Roberto F. De Ocampo          Independent           P10.00 “r”           Filipino   0.00%
                                            Director
 Common       Francisco C. Eizmendi, Jr.    Independent           P10.00 “r”           Filipino   0.00%
                                            Director
 Common       Antonino L. Alindogan, Jr.    Independent           P10.00 “r”           Filipino   0.00%
                                            Director
b.   Senior Management:

 Common       Uy Chun Bing                  Executive     Vice-   P31,700.00 “r”       Filipino   0.03%
                                            President             P2,836,470.00 “b”
 Common       Alfredo S. Del Rosario        Executive     Vice-   P209,000.00 “b”      Filipino   0.00%
                                            President
 Common       Elbert M. Zosa                Executive     Vice-   P100,000.00 “b”      Filipino   0.00%
                                            President
 Common       Eli D. Lao                    Senior        Vice-   P73,370.00 “b”       Filipino   0.00%
                                            President
 Common       Rommel S. Latinazo            Senior        Vice-   P74,000.00 “b”       Filipino   0.00%
                                            President
c. Directors &Principal Officers (as a Group)                     P172,826,330.00                 1.84%
*”r” refers to registered ownership and “b” refers to beneficial ownership

Changes in Control

At present, there is no arrangement known to the Bank which may result in a change in control.

Voting Trust Holders of 5% or More

There are no shareholdings holding any Voting Trust Agreement or any such similar agreement.

Directors and Executive Officers

Per Article V of the Amended By-Laws, all nominations for election of directors by the
stockholders shall be submitted in writing to the President and the Secretary at the Corporation's
principal place of business at least thirty (30) working days before the regular or special meeting
of stockholders for the purpose of electing directors.

All the nominated directors comply with all the qualifications required of a director mentioned
under Sections X141.2 (for director) of the Manual of Regulations for Banks (MORB) and do not
possess any of the disqualifications mentioned under Sections X143.1 (for director) of the MORB,
as amended by Circular No. 513 dated February 10, 2006.
- page 7 -

The Corporate Governance Committee composed of five (5) members, two (2) of whom are
independent directors, review and evaluate the qualifications of all persons to be nominated to
the Board as well as those to be nominated to other positions requiring appointment by the
Board of Directors, i.e, with the ranks of Assistant Vice-Presidents and higher. The Corporate
Governance Committee is composed of Ms. Helen Y. Dee as the Chairman, and Mr. Rizalino S.
Navarro, Atty. Wilfrido E. Sanchez, Mr. Roberto F. de Ocampo, and Mr. Francisco C. Eizmendi, Jr.
as Members.

Likewise, pursuant to the Code of Corporate Governance, all the directors have satisfied the
required number of attendance in board meetings, as well as in their respective Committees. All
the directors, including the Chairman of Corporate Governance and Audit Committees were
present during the last annual stockholders’ meeting to answer any and all queries from the
stockholders.

The Directors will be nominated and elected in accordance with SRC Rule 38.

Mr. Eduardo S. Lopez, Jr., a stockholder who is not in anyway related to the nominees,
nominated to the Board the re-election of Atty. Teodoro Q. Pena, Mr. Armando M. Medina, Mr.
Francisco C. Eizmendi, Jr., Mr. Roberto de Ocampo, and Mr. Antonino L. Alindogan, Jr. as
Independent Directors.

The Independent Directors, Atty. Teodoro Q. Pena, Mr. Armando M. Medina, Mr. Francisco C.
Eizmendi, Jr., Mr. Roberto de Ocampo, and Mr. Antonino L. Alindogan, Jr. have always
possessed the qualifications and none of the disqualifications of an independent director.

The Directors shall hold office for one (1) year and until their successors are elected and
qualified.

Nominees for Independent Directors:

   1.    Atty. Teodoro Q. Pena
   2.    Mr. Armando M. Medina
   3.    Mr. Roberto de Ocampo
   4.    Mr. Francisco C. Eizmendi, Jr.
   5.    Mr. Antonino L. Alindogan, Jr.

Nominees for Directors:

   1.    Sec. Alfonso T. Yuchengco
   2.    Ms. Helen Y. Dee
   3.    Mr. Cesar E. A. Virata
   4.    Mr. Rizalino S. Navarro
   5.    Mr. Lorenzo V. Tan
   6.    Atty. Teodoro D. Regala
   7.    Atty. Wilfrido E. Sanchez
   8.    Atty. Ma. Celia H. Fernandez-Estavillo
   9.    Dr. Reynaldo B. Vea
   10.   Ms. Yvonne S. Yuchengco
- page 8 -


Incumbent Directors/                       (Age)/
Senior Executive Officers                 Citizenship                Position/Period which they had
served

 Alfonso T. Yuchengco                    (87)/              Honorary Chairman (May 27, 2002 to
                                        Filipino            present)
                                                            Director (June 30, 2003 to present)

Position                                                    Company
 Yuchengco Group of Companies                               Chairman
 Pan Malayan Management & Investment                        Chairman of the Board and Chief
 Corporation                                                Executive Officer
 MICO Equities (Holding Company of Malayan Group            Honorary Chairman of the Board
 of Insurance Cos.)
 AY Holdings, Inc.                                          Chairman of the Board
 Waseda Institute for Asia Pacific Studies                  Member of International Advisory Board
 Risumeikan Asia Pacific University                         Member of the Advisory Board
 Corporate Governance Institute of the Philippines          Chairman of the Advisory Board
 Philippine Ambassadors Foundation, Inc.                    Chairman and Member of the Board of
                                                            Governors
 Great Life Financial Assurance Corporation (formerly       Chairman
 Nippon Life Insurance Company of the Philippines)
 House of Investments                                       Member of the Board of Directors
 Bantayog ng mga Bayani (Pillar of Heroes                   Chairman of the Board
 Foundation)
 Blessed Teresa of Calcuta                                  Vice-Chairman of the Board of Judges
 Bayanihan Foundation                                       Chairman of the Board of Trustees
 International Insurance Society (IIS)                      Member, Honors Committee and Former
                                                            Chairman of the Board of Directors and
                                                            Adviser
 Philippine-Japan Society, Inc.                             Director
 Philippine-Japan Economic Cooperation Committee            Member, Advisory Board
 Mclaren School of Business, University of San              Member, International Board of Trustees
 Francisco, USA
 Columbia University, Business School, New York,            Member, Board of Overseers
 USA
 Confederation of Asia-Pacific Chambers of                  Chairman, Advisory Board
 Commerce and Industries (CACCI)
 Pacific Forum                                              Member, Board of Governors
 University of St. La Salle Affiliate College, Roxas City   Member, Board of Trustees
 Malayan College, Inc.                                      Chairman/Trustee
 Asia Society, New York                                     Trustee Emeritus
 Master of Business Administration (MBA) Juris              Chairman of the Board
 Doctor (JD) dual degree program of De La Salle
 University Professional Schools, Inc. Graduate
 School of Business and Far Eastern University
 Institute of Law
- page 9 -

Enrique T. Yuchengco, Inc.                     Chairman
Great Pacific Life Assurance Corporation       Director
GPL Holdings, Inc.                             Director/Chairman
Honda Cars Kalookan, Inc.                      Director/Chairman
RCBC Land, Inc.                                Director
YGC Corporate Services, Inc.                   Chairman/Director
University of Alabama Culverhouse College of   Member, International Advisory
Commerce & Business Administration
Yuchengco Museum                               Chairman
RCBC Realty Corporation                        Chairman

      Helen Y. Dee                  (66)/      Board Chairperson (June 27, 2005 to
                                   Filipino    present)
                                               Director (March 28, 2005 to present)

                     Company                                  Position
Philippine Long Distance Telephone Company     Director
Hydee Management & Resources, Inc.             Chairman/President
Moira Management, Inc.                         President
Tameena Resources, Inc.                        Chairman & CEO
Landev Corp.                                   Chairman
Mapua Board of Trustees                        Member
House of Investments                           Chairman, President & CEO
HI-Eisai Pharmaceuticals, Inc.                 Chairman
Manila Memorial Park Cemetery, Inc.            Chairman
Petro Energy Resources Corp.                   Director
Great Life Financial Assurance Corporation     Director
South Western Cement Corp.                     Director
Seafront Resources Corp.                       Director
Mapua Information Technology Center, Inc.      Chairman
Malayan Insurance Co.                          Chairman/Director
MICO Equities, Inc.                            Director
YGC Corporate Services, Inc.                   President
La Funeraria Paz, Inc.                         Director
Grepalife Fixed Income Fund Corp.              Chairman/ President
Grepalife Asset Management Corp.               Chairman/ President
Pan Malayan Management & Investment Corp.      Director/ Vice Chairman
Isuzu Philippines, Inc.                        Director
Honda Cars Philippines, Inc.                   Director
EEI Corporation                                Board Member
Business Harmony Realty, Inc.                  Treasurer
AY Holdings, Inc.                              Director
Pan Malayan Realty Corp.                       Chairperson
Pan Malayan Express                            Director
RCBC Savings Bank                              Chairperson
Honda Cars Kalookan                            Director
- page 10 -

RCBC Forex Brokers Corp.                              Director/Chairman of Executive
                                                      Committee
Financial Brokers Insurance Agency, Inc.              Chairperson/President
GPL Holdings                                          President
La Funeraria Paz Sucat                                Chairperson/Director
Great Pacific Life Assurance Corp.                    Director
A.T. Yuchengco, Inc.                                  Vice President
Xamdu Motors, Inc.                                    Chairman
National Reinsurance Corporation of the Philippines   Vice-Chairman

  Rizalino S. Navarro                (71)/            Director (September 1, 1999 to present)
                                    Filipino          Executive Vice-Chairman and CEO (June
                                                      28, 2004 to January 2007)
                                                      Senior Adviser (January 05, 2007 to
                                                      present)


                     Company                                          Position
EEI Corporation                                       Chairman
Seafront Resources Corporation                        Chairman
Petroenergy Corporation                               Chairman
Bankard Corporation                                   Chairman
Upline Foods Corporation                              Chairman
Clark Development Corporation                         Chairman
House of Investments, Inc.                            Director
Great Pacific Life Corporation                        Director
Great Life Financial Assurance Corporation            Director
National Development Corporation                      Director
Mapua Institute of Technology                         Director
YGC Corporate Services, Inc.                          Director
Malayan Insurance Co., Inc.                           Director
National Reinsurance Corp. of the Philippines         Director
Ionics, Inc.                                          Director
Bacnotan Consolidated Industries Inc.                 Director
Subic-Clark Area Development Council                  Director
Investment Capital Corporation of the Philippines     Director
Niyog Property Holdings, Inc.                         Director


    Cesar E.A. Virata                (79)/            Director (1995 to present)
                                    Filipino          Corporate Vice-Chairman (June 22, 2000
                                                      to present)

                     Company                                        Position
C.Virata & Associates Inc.                            Chairman & President
Malayan Insurance Co., Inc.                           Director
Great Life Financial Assurance (ex Nippon Life        Director
Insurance)
- page 11 -

RCBC Realty Corp.                               Chairman & Director
RCBC Forex Broker Corporation                   Chairman & Director
Luisita Industrial Park                         Director
Business World Publishing Corp.                 Director (Independent)
Belle Corporation                               Director (Independent)
Mapua Institute of Technology                   Tustee
Coastal Road Corporation                        Chairman / Director
YGC Corporate Services, Inc.                    Director
Pacific Fund, Inc.                              Chairman/ Director
RCBC Land, Inc.                                 President/ Director
RCBC Savings Bank                               Director
Bankard, Inc.                                   Vice Chairman/ Director
Manila Electric Company                         Director
AY Foundation, Inc.                             Trustee
RCBC International Finance Ltd. (Hongkong)      Director
Malayan Colleges, Inc. (Operating under Mapua   Trustee
Insitute of Technology)
Yucehngco Center, Inc.                          Trustee
Yuchengco Museum                                Trustee
Niyog Properties Holdings, Inc.                 Director


     Lorenzo V. Tan                  (48)/      Director/ President and CEO (April 01,
                                    Filipino    2007 to present)


                      Company                                  Position
Smart Communications, Inc.                      Director
RCBC Savings Bank                               Vice Chairman
Bankard, Inc.                                   Director
Great Pacific Life Corporation                  Director
Morphs Lab, Inc.                                Independent Director
Merchants Savings and Loan Association, Inc.    Director/Chairman of the Board
SGV Foundation                                  Board of Trustee
Bankers Association of the Philippines          Director
RCBC Capital Corporation                        Director
RCBC International Finance Ltd./Investment      Chairman
RCBC Telemoney Europe SpA                       Chairman
RCBC North America (Canada)                     Chairman
RCBC North America, Inc.                        Chairman
- page 12 -

  Teodoro D. Regala                (76)/       Director (June 28, 1999 to present)
                                  Filipino


                      Company                                 Position
Angara Abello Concepcion Regala & Cruz Law
Offices                                        Founding Partner
Bankard, Inc.                                  Director
Safeway Philtech, Inc.                         Director
Malayan Insurance Co., Inc.                    Director
Datacraft Communications Systems, Inc.         Director
Datacraft Opsis, Inc.                          Director
MICO Equities, Inc.                            Director
AGC Flat Glass Philippines, Inc.               Corporate Secretary
OEP Philippines, Inc.                          Director/Corporate Secretary
Republic Asahi Realty Corporation              Director


  Wilfrido E. Sanchez              (72)/       Director (March 27, 2006 to present)
                                  Filipino


Quiason Makalintal Barot Torres & Ibarra Law   Tax Counsel
Offices
Adventure International Tours, Inc.            Director
Amon Trading Corp.                             Director
Center for Leadership & Change, Inc.           Director
EEI Corporation                                Director
Eton Properties Philippines, Inc.              Director
Grepalife Asset Management Corp.               Director
Grepalife Fixed Income Fund Corp.              Director
Hecny Forwarders, Inc.                         Director
House of Investments                           Director
JVR Foundation, Inc.                           Director
Kawasaki Motor Corp.                           Director
K Servico Trade, Inc.                          Director
Magellan Capital Holdings Corp.                Director
Omico Corporation                              Director
PETNET, Inc.                                   Director
PETPLANS, Inc.                                 Director
Transnational Diversified Corp.                Director
Transnational Diversified Group, Inc.          Director
Transnational Plans, Inc.                      Director
Universal Robina Corp.                         Director
- page 13 -

Ma. Celia H. Fernandez-                  (38)/        Director (June 26, 2005 to present)
Estavillo                               Filipino      Corporate Secretary (February 28, 2005
                                                      to present)
                                                      Senior Vice-President, Head of Legal and
                                                      Regulatory Affairs Group (July 19, 2006
                                                      to present)


                       Company                                           Position
Luisita Industrial Park Corp.                          Director
Averon Holdings, Inc.                                  Corp. Secretary
Mapua Institute of Technology                          Trustee
Bankard, Inc.                                          Director
RCBC Capital Corporation                               Corporate Secretary
Phil. Integrated Advertising Agency                    Director
RCBC Savings                                           Corporate   Secretary
Yuchengco Center                                       Trustee
Niyog Property Holdings, Inc.                          Corporate   Secretary
Manchesterland Properties, Inc.                        Corporate   Secretary
Rizal Equities                                         Corporate   Secretary
Mont-Sant-Michel Drugs, Inc.                           Treasurer
FBIA Insurance Agency, Inc.                            Treasurer
Calafern, Inc.                                         Treasurer


    Reynaldo B. Vea                     (58)/        Director (March 30, 2009 to present)
                                       Filipino

                    Company                                          Position
Mapua Institute of Technology                        President and CEO
Mapua TechServ                                       President
Mapua Information Technology Center                  President
Wirelesspace, Inc.                                   Director
San Lorenzo Ruiz Institute of Health Sciences        President
Malayan High School of Science                       President
Malayan Colleges Laguna                              President


 Yvonne S. Yuchengco                   (56)/       Director (June 29, 2009 to present)
                                      Filipino     Advisory Board Member (1995 to June 2009)

                    Company                                          Position
AY Foundation, Inc                                 Member, Board of Trustees
Bankers Assurance Corporation                      Director
Enrique T. Yuchengco, Inc                          Asst. Treasurer
GPL Asset Management                               Director
Great Pacific Life Assurance Corp.                 Director
Honda Cars Kalookan                                Treasurer/Director
House of Investment                                Director
- page 14 -

iPeople, Inc.                                   Director
La Funenaria Paz Sucat, Inc.                    Director
La Funenaria Paz, Inc.                          Director
Luisita Industrial Park Corp                    Director
Malayan College                                 Director
Malayan College Laguna                          Director
Malayan High School of Science, Inc.            Director
Malayan Insurance (H.K.)                        Director
Malayan Insurance (U.K.)                        Director
Malayan Insurance Co., Inc.                     President/Director
Malayan International Insurance Corp.           Director
Manila Memorial Park, Inc.                      Director
Mapua Institute of Technology                   Director
MICO Equities, Inc.                             President/Director
National Reinsurance Corp. of the Phils.        Director
Pan Malayan Management & Investment Corp.       Treasurer/Director
Pan Malayan Realty Corp.                        Director
Petro Energy Resources Corp.                    Director
Philippine Integrated Advertising Agency, Inc   Chairperson/Director
PIA/Phil-Asia Assistance Foundation, Inc.       President
RCBC Capital Corporation                        Chairperson/Director
Seafront Resources Corp.                        Director
XYZ Assets Corporation                          Chairperson
Yuchengco Museum Inc.                           Director


    Teodoro Q. Peña                 (78)/         Independent Director (September 2002 to
                                   Filipino       present)
                                                  Director (1995 to September 2002)

                      Company                                    Position
Phil. Constitution Assn.                          Vice-President
Palawan State University                          Regent
Educators, Inc.                                   Director
RCBC Savings Bank                                 Independent Director
                                                  Chairman Audit Com.
EEI Corporation                                   Independent Director
                                                  And Chairman Audit Com.
RCBC Securities                                   Independent Director
Malayan Zurich                                    Independent Director
Bankard, Inc.                                     Independent Director
RCBC Capital                                      Independent Director
Institute of Corporate Directors                  Fellow
- page 15 -


  Armando M. Medina                 (59)/         Independent Director (February 26, 2003
                                   Filipino       to present)

                     Company                                     Position
RCBC Capital Corp.                                Independent Director
RCBC Savings Bank                                 Independent Director
First Malayan Leasing Corp.                       Independent Director
RCBC Forex Brokers                                Independent Director
Great Life Financial Assurance Corporation        Independent Director
Grepalife Asset Management Corp.                  Independent Director
Merchants Savings and Loan Association, Inc.      Independent Director


Roberto F. De Ocampo                (64)/         Independent Director (May 26, 2006 to
                                   Filipino       present
                                                  Director (1995 to September 2002)


                      Company                                     Position
RFO Center for Public Finance and Regional        Chairman of the Board of Advisors
Economic Cooperation
EastBay Resorts, Inc                              Chairman
MoneyTree Publishing Inc.                         Chairman
Stradcom Corporation                              Chairman
Tollways Association of the Philippines           Chairman
Public Finance Institute of the Philippines       Chairman
British Alumni Association                        Chairman
Seaboard Eastern Insurance Co.                    Vice-Chairman
Universal LRT Corporation                         Vice-Chairman
Tranzen Group                                     Vice-Chairman
Montalban Methane Power Corporation               Vice-Chairman
Agus 3 Hydro Power Corporation                    Vice-Chairman
La Costa Development                              Vice-Chairman
Makati Business Club                              Vice-Chairman
Center for Philippine Futuristics Studies and     Vice - President
Management Inc.
AIM – Gov. Jose B. Fernandez Jr. Center for       Executive Director
Banking and Finance
Philam Fund Inc., Philam Bond Fund Inc., Philam   Director and President
Strategic Growth Fund Inc., Philam Managed
Income Fund Inc., AIG Global Bond Fund
Philippines Inc., Philam Dollar Bond Fund Inc.
AB Capital & Investment Corporation               Director
Philippine Phosphate Fertilizer Corporation       Director
Thunderbird Resorts, Inc.                         Director
Alaska Milk Corp.                                 Director
Bankard, Inc.                                     Independent Director
Centennial Group (Washington), D.C.               Director
EEI Corporation                                   Independent Director
- page 16 -

Globe Telecom                                       Director
House of Investments                                Independent Director
PSi Technologies, Inc.                              Director
Beneficial Life Insurance Co., Inc.                 Director
Robinsons Land Corporation                          Director
Salcon Power Corporation                            Director
United Overseas Bank Philippines                    Director
Emerging Markets Forum                              Director
BOAO Forum for Asia                                 Director
DFNN International                                  Director
PHINMA Corporation                                  Director
A Life for Others Foundation                        Founding Trustee
Health Justice Philippines                          Member, Advisory Council
The Conference Board (New York)                     Member, Global Advisory Board
Argosy Fund, Inc.                                   Member, Board of Advisers
Corporate Governance Institute of the Philippines   Member, Board of Advisers
Foundation for Economic Freedom                     Member, Board of Advisers
AES Corporation (Philippines)                       Member, Board of Advisers
Navis Investment Partners                           Member, Board of Advisers
Sa Aklat Sikat Foundation                           Member, Board of Advisers
Philippine Cancer Society                           Member, Board of Advisers
Asian Institute of Management                       Member, Board of Trustees
Angeles University Foundation                       Member, Board of Trustees
Ramos Peace and Development Foundation              Member, Board of Trustees
SGV Foundation                                      Member, Board of Trustees
Trilateral Commission                               Member, Asia Pacific Group Representing
                                                    ASEAN
Renewable Energy Asia Fund (Berkeley Energy,        Strategic Advisor
UK)

Francisco C. Eizmendi, Jr.            (73)/         Independent Director (May 26, 2006 to
                                     Filipino       present)

                     Company                                        Position
Institute of Corporate Directors                    Trustee/Fellow
RCBC Forex Brokers Corp.                            Independent Director
Bankard, Inc.                                       Independent Director
Makati Finance                                      Independent Director
Dearborn Motor Co.                                  Chairman
East West Seed                                      Advisory Board Member


Antonino L. Alindogan, Jr.            (70)/         Independent Director (November 12, 2007
                                     Filipino       to present)

                    Company                                         Position
House of Investments, Inc.                          Independent Director
C55, Inc.                                           President
An-Cor Holdings, Inc.                               Chairman of the Board
- page 17 -

Eton Properties Phils., Inc.                     Independent Director
PAL Holdings, Inc.                               Independent Director
                                                 Independent Director/ ExCom Member/
Philippine Airlines, Inc.                        Audit Committee Chairman


Executive Vice Presidents

BANCOD, Redentor C.             Group Head              Office of the Group Head -   ITSSG
DEL ROSARIO, JR., Alfredo S.    Group Head              Office of the Group Head -   Asset
                                                        Management & Remedial
HILADO, Jose Emmanuel U.        Group Head              Office of the Group Head -   Treasury
SANDIG, Ismael R.               Group Head              Office of the Group Head -   Retail Banking
UY, Chun Bing G.                Group Head              Office of the Group Head -   Corporate
                                                        Banking
ZOSA, Elbert M.                 Group Head              Office of the Group Head -   Corporate
                                                        Planning

First Senior Vice Presidents

ADALIA, Melissa G.              Group Head              Office of the Group Head - Human
                                                        Resources Group
AHYONG, JR., Manuel G.          Segment Head            Wealth Management Segment 2
DE JESUS, Michael O.            Segment Head,           Office of the Segment Head-Corporate
                                Corporate Banking 2     Banking Segment 1
DEVERAS, John Thomas G.         Head, Strategic         Office of the President & Chief Executive
                                Initiatives             Officer
LATINAZO, Rommel S.             Segment Head            Office of the Segment Head-Corporate
                                                        Banking Segment 1
LIM, Ana Luisa S.               Division Head           Office of the Div. Head- Internal Audit
SANTOS, Cynthia P.              Group Head              Office of the Group Head - Overseas
                                                        Filipino Banking Group
VILLANUEVA Edgar Anthony B.     Head                    Global Transaction Services

Senior Vice Presidents

AYES, Marcelo E.                Division Head           Foreign Exchange Risk Division
CRUZ, Angelito C.               Segment Head            Office of the Segment Head - Japan
                                                        Desk/Ecozone
DAYRIT, Rafael Aloysius M.      Division Head           Credit Risk

DY TANG, Siony D.               Division Head           Chinese Banking Division I

ESTAVILLO, Ma. Celia F.         Group Head              Office of the Group Head - Legal &
                                                        Regulatory Affairs
FERRER, Lourdes Bernadette M.   Trust Officer           Office of the Division Head – Trust

GESTA, Prudencio J.             Regional Sales          Visayas Regional Office
                                Manager
- page 18 -

 JACINTO, Deogracias A.               Group Head               Wholesale Consumer Banking (seconded to
                                                               RCBC Savings Bank)
 LAO, Eli D.                          Segment Head             Office of the Segment Head - Chinese
                                                               Segment
 LEDESMA III, Jose P.                 Regional Sales           Southern Metro Manila Regional Office
                                      Manager
 MAGNO, Regino D.                     Group Head               Corporate Risk Management Services
 MARANAN, Remedios M.                 Regional Service Head    Metro Manila Regional Service Office
 MATSUMOTO, Yasuhiro .                Japanese Liaision        Japanese Business Relationship Office
                                      Officer
 ORSOLINO, Reynaldo P.                Division Head            Office of the Division Head - SME Banking

 PINEDA, Maria Lourdes Jocelyn S.     Head, Microfinance       Office of the President & Chief Executive
                                                               Officer

 REYES, Rafael Andres R.              Chief Operating          Seconded to Bankard
                                      Officer

Most of the Directors and Executive Officers mentioned herein have held their positions for at
least five (5) years.

There are no compensation arrangements for members of the Board of Directors, other than the
per diem and dividends provided under Article V, Section 8, and Article XI, Section 2,
respectively, of the Bank’s Revised By-Laws, and there are no warrants/options held by CEO, the
named executive officers, and all officers and directors as a group.

Significant Employees
There is no person other than the entire human resources as a whole, and the executive officers
who are expected to make a significant contribution to the Bank.

Family Relationships
Ms. Helen Y. Dee and Ms. Yvonne S. Yuchengco are daughters of Sec. Alfonso T. Yuchengco, the
Bank’s Honorary Chairman/Director.
Interest on Certain Matters to be Acted Upon
No director or officer of the Bank has substantial interest, direct or indirect, in any matter to be
acted upon in the meeting other than election to office.

Legal Proceedings
In the normal course of operations of the Bank, there are various outstanding commitments and
contingent liabilities such as guarantees, commitments to extend credit, tax assessments, etc.,
which are not reflected in the accompanying financial statements. Management does not
anticipate losses from these transactions that will adversely affect operations.

In the opinion of Management, the suits and claims that remain unsettled, if decided adversely,
will not involve sums that would have a material effect on Bank’s financial position or operating
results.

In June 2003, RCBC Capital, a wholly-owned subsidiary of the Bank, filed an arbitration claim
with the International Chamber of Commerce against Equitable PCI Bank (“Equitable”) relating to
RCBC Capital’s acquisition of Bankard shares from Equitable in May 2000 for a purchase price of
- page 19 -

approximately P1.8 Billion. The claim was based on alleged deficiencies in Bankard’s accounting
practices and non-disclosure of material facts in relation to the acquisition. RCBC Capital sought a
rescission of the sale or damages of approximately P1.0 billion, including interest and expenses.
The arbitration hearings were held before the ICC Arbitral Tribunal (“Tribunal”), being the body
organized by the International Chamber of Commerce.

In September 2007, the Tribunal ruled that RCBC Capital was entitled to damages from
Equitable arising from the breach, the amount of which would be determined by an expert
appointed by the Tribunal and later subject to further hearings in October 2009. A decision on
quantum of damages is expected.

In May 2006, RCBC Capital filed a civil case against SGV for damages of over P560.0 Million.
This civil suit alleges that SGV’s audit reports in respect of Bankard for the fiscal years
commencing in 1997 and ending in 1999, on which RCBC Capital relied when it purchased
Bankard in May 2000 for approximately P1.8 billion, were not prepared in accordance with
Philippine accounting principles that were applicable at the time. The civil case remains pending
with the Regional Trial Court of Makati City.

Except for the above-mentioned lawsuit involving the Bank’s majority owned subsidiary, RCBC
Capital Corporation, and SGV & Company, the Bank is not aware of any suits and claims against
its subsidiaries, which if decided adversely would have a material effect on its financial position
or operating results.

Non-Involvement in Certain Legal Proceedings

In January 2009, a complaint for syndicated estafa was filed at the Department of Justice
(DOJ) against directors and officers of Pacific Plans, Inc. (PPI) by a member of the Parents
Enabling Parents Coalition, Inc. (PEP Coalition) and other individuals. The complaint remains
pending. It should be noted that the pending case of syndicated estafa filed is based on the same
allegations of syndicated estafa filed before, and dismissed by Offices of the City Prosecutors of
Manila, Parañaque, Antipolo and Davao City and even the DOJ in the exercise of its power of
review.

The PEP Coalition also filed a Complaint-Affidavit with the Bangko Sentral ng Pilipinas (BSP)
dated 28 January 2009 against certain directors and officers of Rizal Commercial Banking
Corporation for allegedly committing irregularities and/or unsafe/unsound practices in the
conduct of the Bank’s business, supposedly in violation of Sections 55, 56 and 80 of RA 8791 and
Sections X401 and X408 of the Manual of Regulations for Banks. The named respondents in the
Complaint-Affidavit have filed their Answer to the Complaint-Affidavit and the matter is still
pending with the BSP. The allegations in the Complaint-Affidavit are mere repetitions of the
allegations in Complaint filed by the PEP Coalition filed by the PEP Coalition in 2005, which has
been dismissed by the BSP.

Other than the foregoing, to the knowledge and/or information of the Bank, the nominees for
election as Directors of the Bank, its present members of the Board of Directors or its Executive
Officers are not, presently or during the last five (5) years, involved or have been involved in any
legal proceeding adversely affecting/involving themselves, and/or their property before any court
of law or administrative body in the Philippines or elsewhere.
- page 20 -

No director has resigned or declined to stand for re-election to the board of directors since the
date of the annual meeting of security holders because of disagreement with the Bank on any
matter relating to the Bank’s operations, policies or practices.

Certain Relationships and Related Transactions

The Bank is a member of the Yuchengco Group of Companies (YGC). The Yuchengco family,
primarily through Pan Malayan Management and Investment Corporation, is the largest
shareholder, and as of April 30, 2010 has 473,963,630 shares, or approximately 50.42% of the
Bank’s issued and outstanding common shares.

The Bank and its subsidiaries, in the ordinary course of business, engage in transactions with the
YGC and its subsidiaries. The Bank’s policy with respect to related party transactions is to ensure
that these transactions are entered into on terms comparable to those available from unrelated
third parties.

The law firm of Angara Abello Concepcion Regala & Cruz (ACCRA) Law Office is among the firms
engaged by the Bank to render legal services. Atty. Teodoro Dy-Liaco Regala, Board Member, is a
Senior Partner of ACCRA Law Office. During the year, the Company paid ACCRA legal fees that
the Company believes to be reasonable for the services provided.

The Bank, as Lessor, entered into lease contracts with Great Pacific Life Assurance Corporation
(GPL) and Malayan Insurance Co. Inc. (MICO) for the lease of office spaces. As Lessee, the Bank
has existing lease contracts with GPL for the lease of its Buendia Avenue, Makati City and Fuente
Osmeña branch offices. Sec. Alfonso T. Yuchengco is a Director of GPL and the Honorary
Chairman of MICO Group. Ms. Helen Y. Dee, Ms. Yvonne S. Yuchengco and Messrs. Navarro,
Virata and Regala are also directors of MICO. Ms. Helen Y. Dee and Mr. Navarro are members of
the Board of Directors of GPL.

The Bank is also a lessee of the RCBC Realty Corporation (RRC), of which it directly owns 25%
shareholdings. Additionally, through its equity holdings in RCBC Land Inc., it indirectly owns 9.8%
of RRC. RCBC Land Inc., 49% owned by the Bank, owns 20% of RRC, the owner and developer
of the RCBC Plaza Building complex in which the Bank’s head office is located.

In the ordinary course of business, the Bank has loan and other transactions with its subsidiaries
and affiliates, and with certain directors, officers, stockholders and related interests (DOSRI).
Under existing policies of the Bank, these loans are on commercial, arm’s length terms, i.e.,
substantially on the same terms as loans to other individuals and businesses of comparable risks.

For cost effectiveness and cost-savings, the Bank entered into a Memorandum of Agreement
(MOA) with House of Investments, Inc. (HI), a member of the YGC, for procurement outsourcing.
Under the agreement, HI was the Bank’s sole representative in negotiating the terms of the
contracts with selected suppliers or service providers for the procurement of certain IT related
and non-IT related items. The agreement stipulated that HI would not charge fees for its service
except for its share in the savings generated from suppliers and service providers. Moreover, HI
was obligated to ensure that contracts they initiated do not prejudice the Bank in any way and
that the Bank does not pay more than the cost of buying the items without aggregation.

In December 2006, Bankard and RCBC entered into a services agreement wherein RCBC
outsourced the servicing of the credit card business to Bankard. These services include card
acquisition and marketing services, verification and approval services and collection services.
- page 21 -

Transactions under the agreement are carried out on a “cost plus” basis whereby Bankard
receives a premium above the costs that it expends to conduct its services.

In December 2007, RCBC Land transferred 25% of its equity holdings in RCBC Realty Corporation
to RCBC in partial settlement of its outstanding loan with the Bank.

In October 2009, RCBC entered into a joint development agreement with RCBC Savings Bank,
MICO, Grepalife and Bankard for the development of the RSB Corporate Centre located at
Bonifacio Global City. Pursuant to this agreement, RCBC will obtain ownership and possession of
certain floors in the RSB Corporate Centre building which it will use as office space for some of its
business units. The Bank’s other transactions with affiliates include leasing office premises to
subsidiaries, availment of computer services of an affiliate and regular banking transactions
(including purchases and sales of trading account securities, securing insurance coverage on
loans and property risks and intercompany advances), all of which are conducted in the ordinary
course of business.

The Bank’s other transactions with affiliates include leasing office premises to subsidiaries,
availment of computer services of an affiliate and regular banking transactions (including
purchases and sales of trading account securities, securing insurance coverage on loans and
property risks and intercompany advances), all of which are conducted in the ordinary course of
business.

The Bank does not have any transactions with promoters within the past five (5) years.

Likewise, there are no other transactions during the last two years or proposed transactions, to
which the registrant was or is to be a party, in which any of the aforementioned entities had or is
to have a direct or indirect material interest.

To the best knowledge of the Bank, there has been no adverse complaint/dispute/problem
regarding conflict of interest involving the aforementioned related party transactions as these
were all conducted in the ordinary course of business.

Compensation of Directors and Executive Officers
Information as to aggregate compensation paid or accrued during the last two completed fiscal
years and the ensuing fiscal year to the Bank’s Chief Executive Officer and four other most highly
compensated executive officers and all officers and directors as a group unnamed.

Executive Compensation
Information as to aggregate compensation paid or accrued during the last two completed fiscal
years to the Bank’s Chief Executive Officer and four other most highly compensated executive
officers follows:
- page 22 -


Chief Executive Officer and four most highly compensated executive officers.

                                                                         Aggregate
                                                                       Compensation
          Names                   Principal Position         Year         (net of          Bonuses
                                                                         bonuses)
Lorenzo V. Tan                  President     &     Chief    2010              35,779           7,495
                                Executive Officer

Redentor C. Bancod              Executive Vice President

Uy Chun Bing                    Executive Vice President

Jose Emmanuel U. Hilado         Executive Vice President

Ismael R. Sandig                Executive Vice President

Lorenzo V. Tan                  President     &     Chief    2009                35,077         8,135
                                Executive Officer

Redentor C. Bancod              Executive Vice President

Uy Chun Bing                    Executive Vice President

Jose Emmanuel U. Hilado         Executive Vice President

Ismael R. Sandig                Executive Vice President
Lorenzo V. Tan                  President     &     Chief    2008                31,703         6,370
                                Executive Officer

Uy Chun Bing                    Executive Vice President

Redentor C. Bancod              Executive Vice President

Ismael R. Sandig                Executive Vice President

Ernesto P. Pinpin               Executive Vice President
All Officers and Directors as                                2010              P759,496     P253,165
a Group Unnamed                                              2009               762,083      246,307
                                                             2008               633,610      162,402


Profit Sharing Bonus
The members of the Board of Directors, the Advisory Board, the Executive Committee and the
Officers of the Bank are entitled to profit sharing bonus as provided for in Section 2 Article XI of
the By-Laws of the Bank.

Likewise, the members of the Board of Directors and the Advisory Board are entitled to per diem
for every meeting they attended. For the years 2009 and 2008, total per diem amounted to
P5.351 million and P5.563 million, respectively.
- page 23 -



The above-named executive officers and directors, and all officers and directors as a group, do
not hold warrants or options as the Bank does not have any outstanding warrants or options.


Independent Public Accountants
Punongbayan and Araullo acts as independent auditor of the RCBC, RCBC Savings Bank and
RCBC Forex Brokers Inc since 2006, of RCBC Capital since 2003, and of Merchants Savings and
Loan Association, Inc since 2008.

In connection with the audits of the Bank’s financial statements for the two (2) most recent years
ended December 31, 2009 and 2008, there were no disagreements with Punongbayan and
Araullo, on any matter of accounting principles and practices, financial statement disclosures,
audit scope or procedure.

Punongbayan & Araullo is the Bank’s independent public accountant and they will be likely
recommended for re-election at the scheduled annual stockholders’ meeting. Punongbayan &
Araullo has been the independent external auditor of the Bank beginning with the audited
financial statements (AFS) for the year ended December 31, 2005, with Mr. Leonardo Cuaresma,
Jr. as the handling/signing partner. The rule allows Mr. Cuaresma, Jr. to be the handling/signing
partner of the Bank's AFS for a period of five (5) years or up to the year ended December 31,
2009. Thereafter, Mr. Benjamin P. Valdez shall replace Mr. Cuaresma, Jr. as the handling/signing
partner.

Representatives of Punongbayan & Araullo are expected to be present at the stockholders’
meeting and will have opportunity to make statement if they desire to do so and will be available
to answer appropriate questions.

The Members of the Audit Committee are as follows: Atty. Teodoro Q. Pena as Chairman and
Messrs. Roberto F. de Ocampo, Armando M. Medina, Rizalino S. Navarro as Members

The Bank is in compliance with the SRC Rule 68 (3)(b)(iv).


                        ISSUANCE AND EXCHANGE OF SECURITIES

Authorization or Issuance of Securities Otherwise than for Exchange

    a. Title and amount of securities to be authorized
       Common Shares—1,400,000,000 (300,000,000 increase from current 1,100,000,000
       common shares)
- page 24 -



   b. Description of RCBC securities to be authorized

        •     Common

        •     1,400,000,000 shares (300,000,000 increase from current 1,100,000,000 common
              shares)

        •     Common Shares of stock are entitled to participate and vote at stockholders’ meetings
              or in connection with any corporate action in which the consent and approval of
              stockholders is required by law.
        •     Dividends are declared and paid out of the surplus profits of the Bank as often and at
              such times as the Board of Directors may determine after making provisions for the
              necessary reserves in accordance with law and the regulations of the Bangko Sentral
              ng Pilipinas

        •     Per Article VII of the Amended Articles of Incorporation, common stockholders of
              record at any time when the Corporation offers for subscription a part or all of its
              authorized but unsubscribed shares shall have preferential rights as against third
              parties to subscribe for a proportionate share of such shares offered, and in case
              some of the existing stockholders do not take up their respective pre-emptive rights,
              the Board, or Officers of the Corporation as may be delegated by the Board, shall
              thereafter allocate the same proportionately to all the qualified stockholders who are
              willing to take them up. Thereafter, the Corporation may offer for subscription a part
              or all of its authorized but unsubscribed shares to third parties. This provision shall
              not apply in case of any public offering of authorized but unissued shares of the
              capital stock to raise capital of the Corporation ( subject for deletion of the proposed
              Amendment of Amended Articles of Incorporation )

        •     Per Article V of the Amended By-Laws, no person shall be qualified or be
              eligible for nomination .or election to the Board of Directors if he is engaged in
              any business that competes with or is antagonistic to that of the corporation,
              its subsidiaries or affiliates, as may be determined by the Board of Directors,
              in the exercise of its judgment in good faith, by at least a majority vote.
              Without limiting the generality of the foregoing, a person shall be deemed to
              be so engaged:

                  (i) If he is an employee, officer, manager or controlling person, or the
                  owner (either of record or beneficially) of ten per cent (10%) or more of
                  any outstanding class of shares, of any corporation (other than one in
                  which the Corporation owns at least thirty per cent (30%) of the capital
                  stock) or entity engaged in a business that the Board of Directors, by at
                  least a majority vote, determines to be competitive or antagonistic to that
                  of the Corporation or any of its subsidiaries or affiliates; or

                  (ii) If he is an employee, officer, manager or controlling person, or the
                  owner (either of record or beneficially) of ten per cent (10%) or more of
                  any outstanding class of shares, of any corporation or entity engaged in
                  any line of business of the Corporation or any of its subsidiaries or
                  affiliates, when in the judgment of the Board of Directors, by at least a
- page 25 -

                  majority vote, the laws against combinations and restraint of trade shall
                  be violated by such person's membership in the Board of Directors; or

                  (iii) If the Board of Directors, in the exercise of its judgment in good faith,
                  determines by at least a majority vote, that he is a nominee of any person
                  set forth in (i) and (ii) above. In determining whether or not a person is a
                  controlling person, beneficial owner, or the nominee of another, the
                  Board of Directors may take into account such factors as business and
                  family relationships.

        •     No other material rights

        •     Preferred stocks are not included in this authorization.

   c. Brief description of transaction in which the securities are to be issued

        •     Par value of P10.00; Consideration to be received is upwards of P3.0 Billion for all
              300 Million common shares. Consideration is expected to be in cash;
        •     Purpose of increase in authorized capital stock is to increase capital of the Bank in
              response to the call of the BSP for capital raising and for general corporate purposes.
              There is no specific purpose for the capital to be raised. Increase in authorized
              capital stock is required since the existing common shares does not allow the Bank to
              raise capital as required by the Bangko Sentral ng Pilipinas. No further authorization
              for the issuance of the securities is needed from the stockholders once the increase
              in authorized capital stock is approved.


                                          OTHER MATTERS

Amendment of Articles of Incorporation

Article SEVENTH of the Amended Articles of Incorporation, as further amended, as follows:

(a) Increase in authorized common shares of the Bank, to read as follows:

                           “SEVENTH— That the authorized capital of said Corporation is
                  SIXTEEN BILLION PESOS (P16,000,000,000.00), Philippine Currency,
                  divided into the following classes of shares:

                        1. One Billion Four Hundred Million (1,400,000,000)
                           Common Shares of stock with par value of Ten Pesos
                           (P10.00) per share.
                        2. Two Hundred Million (200,000,000) Preferred Shares
                           of stock with a par value of Ten Pesos (P10.00) per
                           share.

                                                  xxx
- page 26 -


(b) Removal of pre-emptive rights, to read as follows:


        “No holder of Preferred Shares shall be entitled as such to pre-emptive right to purchase
or subscribe to any issue or disposition of shares of any class of the Corporation, whether out of
unissued shares of the capital stock authorized by this Article SEVENTH or otherwise.         (As
amended on May 29, 2006)

         “Holders of Preferred shares shall be given preference over holders of Common Shares in
the (i) distribution of dividends and (ii) distribution of corporate assets in the event of liquidation.
The preference in assets of the holders of Preferred Shares shall be up to the value of the issue
price.

         “The foregoing features of the Preferred Shares shall be printed in the Stock Certificates
to be issued by the Bank.

         “Common stockholders of record at any time when the Corporation offers for subscription
a part or all of its authorized but unsubscribed shares shall have preferential rights as against
third parties to subscribe for a proportionate share of such shares offered, and in case some of
the existing stockholders do not take up their respective pre-emptive rights, the Board, or
Officers of the Corporation as may be delegated by the Board, shall thereafter allocate the same
proportionately to all the qualified stockholders who are willing to take them up. Thereafter, the
Corporation may offer for subscription a part or all of its authorized but unsubscribed shares to
third parties. This provision shall not apply in case of any public offering of authorized but
unissued shares of the capital stock to raise capital of the Corporation. (As amended on May 29,
2006)

         “Holders of the capital stock, whether common or preferred, shall have no pre-emptive
right to subscribe for or purchase any shares of any class.

         “No liability for damages of any kind shall attach to the Corporation, its Board of Director
or Officers by their refusal to register in the corporate books any issuance, sale or transfer of
shares of stock of the Corporation, whether voluntarily or by operation of law, made in violation
of the restrictions above set forth.

       “The foregoing provisions shall be printed on the Certificates of Stock to be issued by the
Corporation.”

                                                  xxx

The reasons for the amendments are (a) to increase the Bank’s authorized capital stock in
anticipation of regulatory requirements for Philippine banks to significantly increase their core
capital ratios, and (b) to afford the Bank more flexibility for capital raising activities, encourage
more investors and allow for an increase in free float of the Bank’s stocks.
- page 27 -

Action With Respect to Reports

The Management Report, as set forth in the Annual Report, and the Minutes of the previous
stockholders’ regular meeting held on June 29, 2009 will be submitted for stockholders’ approval.

Approval of the Annual Report constitutes a ratification of the Bank’s performance during the
previous fiscal years as contained in the Annual Report.

Approval of the June 29, 2009 Minutes constitutes a ratification of the accuracy and faithfulness
of the Minutes to the events that transpired during said meeting, such as, (a) 2008 annual report
and audited financial statements, (b) ratification of actions and proceedings of the Board of
Directors, different Committees and Management during the year 2008, (c) election of directors,
(d) appointment of external auditor, and (e) amendment of Article IV of the Amended Articles of
Incorporation.

The corporate acts of the Board of Directors, different Committees and Management that are
subject to ratification are those made from the date of the last annual stockholders’ meeting
(June 29, 2009) up to the date of the meeting (June 28, 2010). These include, among others,
those that involve day-to-day operation, administration and management of the corporate affairs
such as approval of loans, restructuring of past due accounts, sale of ROPOAs,
appointment/resignation of directors/officers, sanctions/disciplinary measures imposed to erring
officers/employees, authority to file criminal/civil complaints.

Voting Procedures

The vote required for election or approval.

In the election of Directors, the fifteen (15) nominees with the greatest number of votes will be
elected Directors.

In the other proposals or matters submitted to a vote, a vote of the majority or super majority,
as the case may be, of the shares of the capital stock of the Bank present in person or
represented by proxy at the meeting is necessary for approval of such proposals or matters.

The method by which votes will be counted
Each shareholder may vote in person or by proxy the number of shares of stock standing in his
name on the books of the Bank. Each share represents one vote. Voting shall be by balloting.
The Corporate Secretary, Atty. Ma. Celia H. Fernandez-Estavillo, shall count the votes to be cast.

No director has informed the Bank of any intention to oppose the matters to be taken up in the
annual meeting

                                         SIGNATURES
ANNUAL REPORT ACCOMPANYING INFORMATION STATEMENT
REQUIRED UNDER SRC RULE 17.1 (b)


(A)   Audited Consolidated Financial Statements

Attached is the Audited Financial Statements of the Bank as of December 31, 2009 as required by
Rule 68 of the Securities Regulation Code.

(B) Management Discussion and Analysis of Financial Conditions and Results of
    Operations ( 2007-2010) and Plan of Operations


2007 The impetus for economic growth was sustained in 2007 due to strong economic
fundamentals, the generally peaceful May elections, the continued appreciation of the peso and
strong corporate results. These positive developments, however, were negated by soaring oil
prices, widening global credit crunch resulting from the subprime mortgage crisis in the US, huge
equities sell-offs globally and the slowing US economy. Foreign portfolio investments posted a
net inflow in 2007, 35% higher than the US$2.6 billion figure reported for 2006.
Although inflation accelerated to its highest level in December to 3.9%, the full year average of
2.8% is way below the official target of 4.0-5.0 percent. It also reflected a sharp slowdown from
the previous year’s 6.2% full year average. The strong peso against the US dollar helped reduce
average domestic prices as it provided stability to import costs, e.g., crude oil and petroleum
products. However, the rising price of oil remains a challenge as it poses upside risks to inflation.
The sustained inflows of remittances from overseas Filipinos and foreign investments resulted in
the continued appreciation of the peso, record-high gross international reserves, cheaper
importation costs and lower servicing of foreign currency denominated debts. For the third
straight year, the average foreign exchange rate appreciated by 10.08% from P51.29 in 2006 to
P46.12 in 2007 to the US dollar. At yearend, the peso-dollar exchange rate stood at P41.28,
15.84% stronger than the previous year’s P49.05 to the US dollar. Consequently, the peso was
among the best performing currencies in Asia in 2007. The weakening of the US dollar against
major global currencies further contributed to the pesos strength.
The benchmark 91-day Treasury bill as of end-2007 posted an average of 3.40%, lower than the
5.19% the previous year, partly supported by lower inflation, improvement in the country’s fiscal
position and the large surplus in the balance of payments. Relatively low borrowing costs due to
the prevailing low interest rates encouraged greater economic activity in terms of new
investments and expansion projects. Consequently, higher demand for commercial loans was
sustained during the year. On the other hand, the average US dollar Singapore Offered Rate
(SIBOR) gained 14 basis points year on year from 5.02% at end 2006 to 5.16%.
The Bank showed its strength and resilience as an emerging force and major player in the
banking industry as it successfully prevailed over the challenges of the past year. The Bank’s
improved performance was largely attributed to the structural and operating strategies
undertaken over the past two years, the P5.6 billion new capital raised in February 2007, the
aggressive low cost deposit campaign, prudent loan growth and treasury trading strategy.
Coupled with an intensified marketing campaign to improve the services offered, these strategies
resulted in a healthy growth in revenues.
In 2007 and thereafter, the Bank’s strategy would be repositioning for sustainable growth. Its
goal would be to attract additional clients a year with the introduction of new products and
services, expansion of the Bank’s presence and network and brand building. Additionally, the
Bank intends to tap the country’s middle class, overseas Filipino workers (OFWs) abroad and the
- page 2 -

small and medium enterprises (SMEs). The middle class constitutes the biggest segment of the
country’s income brackets while the SMEs represent about 98% of the businesses in the country.
Additionally, the Bank would invest in technology and people as it plans to open more ATMs in
the next three years and hire young, dedicated and competent people.
RCBC continues to be in the market for well-managed mid-sized commercial banks and thrift
banks which may enable the Bank to increase its resource base and expand its branch network
and reach in a cost-efficient manner. The Bank intends to adopt a two-ATM per branch strategy
in 2008 to reduce over-the-counter transactions and allow bank personnel to deal with loans and
deposits and other transactions that require human intervention including marketing.
The Bank likewise plans to boost its global presence with the opening of several overseas
branches within the next three years as well as put up new remittance centers in Canada, the
US, the Middle East and the United Kingdom. To capture and serve the banking needs of
migrant Filipinos, RCBC offers deposit accounts, investments, trust, bancassurance, business and
property solutions to overseas Filipino workers through its remittance contact points that have an
expansive branch network and tie-ups. To further improve its market share in the remittance
market, other initiatives like tie-ups with shipping and manning agencies for the payroll and
remittance needs of their seamen are being expanded. Tie-ups with real estate developers who
use banks to receive remittance payments from overseas Filipino buyers are also being pushed.
Moreover, the development of a web-based channel for OFWs is in the pipeline.
To show that the Bank is committed to reaching out to its clients by giving them more access to
the wide array of products and services, the Bank recently opened business centers in various
locations throughout the country. It is also considering putting up more ATMs in the next three
years after rationalizing the deployment of its ATMs and finalizing a definitive five-year plan for it.
ATMs play a crucial part in the Bank’s plan to expand its clientbase. It should be a strong
channel which can be used to offer the various products and services of the Bank.
Consolidated total resources at the end of 2007 stood at P239.098 billion, 6.88% or P15.388
billion higher than the previous year’s P223.710 billion.
The P15.388 billion expansion in total assets was mainly due to the increase in cash and other
cash items, deposits maintained with the Bangko Sentral, trading and investment securities, loans
and other receivables and investments in associates of 17.38%, 27.73%, 9.64%, 7.58% and
103.60%, respectively. This was neutralized, however, by the drop in deposits with other banks,
investment properties and deferred tax assets of 38.00%, 22.27% and 10.17%, respectively.
Accounting for 7.37% of total assets, deposits with the Bangko Sentral went up by P3.823 billion
due to higher balances of the bank’s Reserve Deposit Account (RDA) for reserve requirement
purposes. Although total investment securities grew by 9.64% only and represented 27.01% of
total resources, available for sale securities (AFS) increased by 14.24% or by P6.809 billion. The
impressive growth in deposit liabilities allowed the Bank to invest in high yielding AFS particularly
ROPs, FXTNs, CLNs and CDOs.
However, the growth in AFS was offset by 10.19% decline in fair value through profit and loss
(FVTPL) securities. The decrease was due to the drop in foreign currency denominated bonds
and securities partly arising from the peso appreciation.
Loans and other receivables, at 49.02% of total assets, went up by P8.262 billion. The
remarkable loan growth was primarily due to the prevailing relatively low interest environment
that attracted more borrowers. Additionally, borrowers were generally optimistic and encouraged
by the country’s improved economy and low inflation that pushed them to pursue expansion
projects and carry out new investments.
- page 3 -



The substantial growth in investment in associates of P2.123 billion was largely due to the
acquisition of 25% direct equity in RCBC Realty Corporation (RCBC Realty). RCBC Land Inc.
(RCBC Land) partially settled its obligation to the Bank through dacion en pago of its holdings in
RCBC Realty on December 26, 2007. The Monetary Board, in its Resolution No. 1097 dated
September 27, 2007, approved the proposed dacion en pago of the RCBC Realty shares owned
by RCBC Land to RCBC.
Due to the Bank’s shift to higher yielding investments, deposits with other banks contracted by
38.00%, from P7.654 billion to P4.745 billion. Interest earning assets, thus, expanded by P13.940
billion from P167.839 billion at yearend 2006.
Investment properties decreased from P9.985 billion to P7.761 billion, or by 22.27%, as the Bank
aggressively pursued the disposition and/or sale of acquired real estate properties through
negotiated sales and auctions. Deferred tax assets also went down by 10.17% mainly due to
RCBC Savings Bank’s (RSB) deferred tax assets reversal by P179.5 million.
Of total investment securities, AFS securities and FVTPL securities accounted for 22.85% and
4.17%, respectively, of total assets. Other resources-net at P12.002 billion comprised 5.02% of
total resources.
Sources of funds came mainly from interest bearing liabilities that grew by 6.54% to P199.558
billion. Other liabilities declined by P2.497 billion, or by 19.19%. Capital funds expanded by
24.06% to P29.020 billion.
Deposit liabilities at P175.929 billion grew by 11.67% from P157.550 billion. Peso and foreign
currency denominated deposits expanded, in spite of the continued appreciation of the peso and
low interest rates, and were used to fund the growth in total loans. The building of a strong
sales culture across the Bank and the deposit campaign launched to target not only niche clients
but also potential clients with average incomes and those working and living overseas contributed
to the substantial growth in deposits. Accordingly, demand, savings and time deposits went up
by 8.98%, 15.17% and 9.70%, respectively.
The 27.30% drop in bills payabe from P17.634 billion to P12.820 billion was due to maturing
obligations. Similarly, bonds payable declined by 15.52% from P6.689 billion on account of the
impact of revaluation arising from a strong peso. The peso-dollar exchange rate closed at P41.28
at yearend 2007, 15.84% stronger than the previous year’s P49.05.
The substantial decrease in due to other banks of P2.620 billion or 77.16% was mainly
attributable to the lower credit balances, which are temporary in nature, of working funds
maintained with local and foreign correspondent banks. These accounts are funded by inward
remittances subject to drawing by payment order.
Although interest rates were lower this year as earlier mentioned, accruals of interest, taxes and
other expenses expanded to P3.088 billion or by 8.90% due to the remarkable growth in deposit
liabilities and revenues year on year.
Total liabilities accounted for 87.86% of total resources. At 73.58% of total assets, total deposit
liabilities continued to be the Bank’s main source of funding, particularly savings and time
deposits which comprised 27.93% and 41.15%, respectively, of total resources. Bills payable
representing 5.36% of total resources is another important source of funding for liquidity
purposes.
The successful follow-on offering of P5.6 billion worth of additional shares in March 2007
increased Bank’s capital funds, inclusive of minority interest and representing 12.14% of total
resources, to P29.020 billion or 24.06% higher than P23.392 billion in 2006.
- page 4 -

On account of conversions to common stock, preferred stock was 18.53% lower this year from
P1.055 billion. The P3.299 billion or 52.12% expansion in common stock was primarily due to
the additional public offering of approximately 210 million shares (including the greenshoe
offering), the 15% stock dividend equivalent to about 109 million shares and the conversion to
common shares or preferred shares.
The P3.453 billion improvement, from P2.119 billion to P5.572 billion, of capital paid in excess of
par resulted from the issuance of common shares and conversion of preferred shares at a
premium. Revaluation reserves on AFS securities and accumulated translation adjustment both
declined by 64.34% and 55.77%, respectively, on account of securities sold during the year that
resulted to realized trading gains and the continued appreciation of the peso.
The Bank’s consolidated net income of P3.208 billion for the year 2007 primarily accounted for
the 19.22% growth in surplus account. This was, however, offset by the 15% stock dividends,
cash dividend payments to common and preferred shareholders in the total amount of P527
million and P77 million, respectively, and dividends/interest payment on hybrid tier 1 securities of
P452 million.
Minority interest was 10.25% higher from negative P283 million to negative P312 million on
account of the higher percentage ownership of minority shareholders in subsidiaries that are not
wholly owned.
On October 30, 2007, the Bank’s Board of Directors approved the acquisition of Merchants
Savings and Loan Association, Inc. (Merchants Bank) from Finman Capital Corporation and the
heirs of the late Luis O. Manapat for P520 million. Closing of the transaction is subject to a
successful negotiation of the relevant agreements as well as Bangko Sentral approval of the
terms and conditions of the relevant agreements.
Merchants Bank is a thrift bank established in 1977. It has 21 operating branches, 7 branches
are located in Metropolitan Manila while the rest are dispersed over Luzon (7), Visayas (4), and
Mindanao (3). The proposed acquisition is part of the Bank’s strategy to increase its branch
network.
The Bangko Sentral’s Monetary Board, in its Resolution No. 89 dated January 24, 2008, approved
the Bank’s planned offering of tier 2 notes of up to P7 billion. The notes would qualify as Lower
Tier 2 capital and would have a call option after the fifth year, giving the Bank the right but not
the obligation to redeem the notes on that year. The new capital will replace RCBC’s maturing
Tier 2 capital worth P5 billion issued in 2003. The capital notes were successfully issued on
February 22, 2008.
The Bank currently services its clients through its 301 branches and 300 ATMs nationwide. The
Bank recently launched a battery of new products meant to enhance its current retail market
products and servies: (a) E-woman, a checking account exclusively designed for women that
provides special perks and privileges; (b) Rizal Enterprise Checking Account, an interest bearing
checking account with a free accounts payable software that automates the process of printing
checks and reconciling payables; (c) RCBC Retail Internet banking platform that provides clients
access to their RCBC accounts 24/7; and (d) RCBC Bankard Diamond credit card. With these
innovative financial products and services that are sensitive to the needs and wants of its clients,
the Bank expects that its efforts would eventually pay-off in terms of increased profitability and
higher market share. To date, the Bank has already begun to reap the benefits of the structural,
operational and capital improvements initiated in the past two years with the successful offering
of P5.6 billion public offering in March 2007.
During the year, there were no known trends, demands, commitments, events or uncertainties
that would have a material impact on the Bank’s liquidity. The Bank does not anticipate having
- page 5 -

within the next twelve- (12) months any cash flow or liquidity problems. It is not in default or
breach of any note, loan, lease or other indebtedness or financing arrangement. Further, there
are no trade payables that have not been paid within the stated terms.
To the knowledge and/or information of the Bank, there are no events that will trigger a direct or
contingent financial obligation that is material to the company, including any default or
acceleration of an obligation. There were no material off-balance sheet transactions,
arrangements, obligations (including contingent obligations), and other relationships of the
company with unconsolidated entities or other persons created during the reporting period.
The year 2007 was another good year for the Bank. It recorded its highest net income in history
of P3.208 billion, 56.27% above last year’s P2.053 billion.
The remarkable growth in net revenues was largely due to the 21.50% improvement in net
interest income from P7.258 billion last year. Representing 44.39% of gross revenues, net
interest income was higher year on year on account of higher average interest earning assets
and the hike in low-cost funds, particularly traditional deposits, and lower interest rates. Interest
rates were considerably lower year on year as the benchmark 91-day Treasury bills averaged
3.40% this period from 5.19%, declining 179 basis points year on year. Additionally, the
continued appreciation of the peso contributed to the reduction in interest expenses year on
year. Consequently, total interest expense dropped 19.31% as interest on deposits and
borrowings went down by 16.59% and 23.81%, respectively. Though interest income from loans
and receivables and investment securities were slightly lower year on year due to the continued
softening of interest rates, interest income from deposits rose 102.59% year on year as the Bank
participated in the Special Deposit Account window of the Bangko Sentral in 2007. These
placements were subject to tiered interest rates compared with interbank call loans. As a result
total interest income remained stable at P15.330 billion from P15.328 billion.
Accounting for 77.16% of gross revenues, total interest income of P15.330 billion comprised
mainly of interest income from loans and receivables and investment securities that accounted
for 48.24% and 24.75%, respectively, of total income. At 32.77% of gross income, total interest
expense of P6.511 billion consisted of interest on deposit liabilities and bills payable and other
borrowings, representing 21.10% and 11.67% of gross revenues, respectively. Net income of
P3.208 billion accounted for 16.14% of gross income.
As the quality of Bank’s assets continued to improve, provisioning for impairment losses at P942
million was 46.12% lower year on year.
Other income of P4.538 billion accounted for 22.84% of gross income, mainly consisting of
trading and securities gain-net, service fees and commissions and other income, 6.69%, 7.62%
and 5.83% of total revenues, respectively. The 44.10% drop in trading and securities gain-net,
25.02% decline in trust fees and 16.17% decrease in commissions and other income, offset by
the 40.40% and 52.08% growth in service fees and equity in net earnings of associates,
respectively, accounted for the lower other income year on year. Other income went down by
14.62% from P5.315 billion.
Operating expenses of P8.325 billion comprised 41.90% of gross profits and was relatively flat as
the Bank aggressively improved its credit card operations and focused on the expansion of its
retail banking network. Manpower costs, occupancy and equipment related expenses and taxes
and licenses accounted for 12.00%, 7.10% and 5.38%, respectively, of total income. The 9.15%
increase in manpower costs from P2.184 billion was basically due to the impact of the new CBA
agreement that became effective in the last quarter of 2006. The higher cost of training and
other employee benefits further contributed to the increase.      On the other hand, taxes and
licenses went down by 21.94% from P1.369 billion largely due better tax management and the
availment of discounts on local taxes and fees. Additionally, there was a one-time payment for
- page 6 -

abatement of taxes paid to the Bureau of Internal Revenue (BIR) in December 2006. The Bank
availed of the One-time Administrative Abatement Program of the BIR under Revenue
Regulations No. 15-2006, which provides for the abatement of all penalties, including surcharges
and interest on delinquent accounts or assessments, including those subject to ongoing disputes.
Similarly, foreign exchange loss-net decreased by 39.77% year on year from P261 million.
Miscellaneous operating expenses, representing 15.04% of gross revenues, went up by 9.46%
on account of the continuous enhancements and/or improvements to Bank’s communications and
information technology infrastructure in support of its goals. Likewise, consultancy and
professional fees incurred and the fees paid to the Philippine Deposit Insurance Corporation
(PDIC) and the Bangko Sentral ng Pilipinas (BSP) went up as a result of the increase in deposit
liabilities and total assets. Overall, operating costs during the year were effectively managed and
controlled.
At P846 million, provision for tax expense increased by 34.90%, or by P219 million, as a major
portion of Bank’s revenues were subjected to final taxes withheld at source. The deferred tax
assets reversal of RSB for P179.5 million likewise contributed to the increase in taxes. Minority
interest in net income went up to P36 million from negative P163 million due to the continued
improvement in the profitability of Bank’s not wholly owned subsidiaries.
Total budget for consolidated capital expenditures for the year 2008 amounts to P1.619 billion.
Primary capital expenditures would include the continuous upgrade and developments to its IT
infrastructure, including software, as well as investments in the expansion of its branch network.
In 2007, there were no known trends, events or uncertainties that have had or that are
reasonably expected to have a material favorable or unfavorable impact on net revenues from
continuing operations.
Similarly, there were no significant elements of income or loss that did not arise from the Bank’s
continuing operations.
Lastly, there were no seasonal aspects that have a material effect on the financial condition or
results of operation of the Bank.
- page 7 -



2008. Philippine GDP in 2008 grew 4.6%, the lowest in 6 years (since 2002) and down from
the 31-year high of 7.2% in 2007. Similarly, Philippine GNP growth slowed down to 6.1% vs.
8.1% in the previous year.

The US economy, the world’s largest and among the biggest export markets of the Philippines,
was already in recession since December 2007. Developed countries (US, Europe, Japan) were
expected to contract simultaneously for the first time since World War II. Inflation averaged
9.3% in 2008, sharply up vs. the 2-decade low of 2.8% in 2007, after the sharp increase in the
prices of oil, rice, and other global commodities in the early part of 2008. However, inflation
started to taper off from the 17-year high of 12.5% posted in Aug. 2008, after prices of major
global commodities collapsed in the latter part of 2008, as weaker global economic conditions
translated to lower demand. By December 2008, inflation already receded to a 9-month low of
8%.

The 91-Day Treasury Bill Rate ended 2008 at 6.12%, nearly double the 3.67% posted a year
earlier, fundamentally consistent with higher inflation. However, it is important to note that the
BSP already reduced the key Philippine interest rates towards the end of the year, in line with the
global trend, as inflationary pressures eased with the collapse in the prices of oil and other major
global commodities. Consequently, key Philippine interest rates in the secondary market, as
measured by the PDST yields, mostly fell to near 1-year lows towards end-2008. The Peso
Exchange Rate depreciated in 2008 by 6.24 Pesos or 15% to close at 47.52 vs. 41.28 in the
previous year, similar to the depreciation in most of the other Southeast Asian currencies.
Philippine Gross International Reserves (GIR) reached a record high of US$37.6 billion or
equivalent to 6 months worth of imports (double compared to the 1990s), thereby increasing the
country’s foreign exchange buffer stock and cushion against speculative attacks on the local
currency.

OFW Remittances for 2008 increased by 13.7% to US$16.4 billion, slightly better than the 13.2%
growth posted in 2007, as OFW deployment increased by 28% to 1.4 million, significantly higher
compared to the 1% growth in 2007. However, for the month of December 2008, it is important
to note that OFW Remittances already slowed to a 2-year low of +1% and OFW Deployment
already declined by 6%.

The global economic recession already weighed on international trade. Exports declined by an
average of 3% to US$49 billion in 2008, compared to a growth of 6% in 2007. It is very
important to note that exports for the month of December 2008 dramatically fell by 40%, the
most in at least 28 years. Imports posted a slight growth of 2% in 2008 to US$56.6 billion vs. the
8% growth in the previous year. However, for the month of December 2008, imports sharply
declined by 34%, the most in at least 28 years. Trade Balance for 2008 was wider at -US$7.6
billion compared to –US$5 billion in the previous year.

2008 was a challenging year for the local banking industry. Almost all the big banks are expected
to post lower income for the whole of last year due to their Lehman exposures. However, RCBC
showed real toughness. In the midst of a very tough environment, RCBC posted a growth in total
resources of 12.20%. Although the Bank’s consolidated net income has declined by 32.86% from
P3.208 billion in 2007 to P2.154 billion in 2008, the Bank’s interest income from loans grew by
13.58% on the expansion of its loan portfolio in the various market segments. Likewise, fees and
commissions and other income increased by 8.51% and 73.07%, respectively, with the ongoing
strategy to not only increase the number of customers but also the volume in remittances, trust
- page 8 -

and other fee-based services. RCBC’s final figures reflect the ongoing developments in the global
economy.
But as the Bank continues to strive with the challenges in the present economy, its goal to attract
additional one million clients a year with the introduction of new products and services,
expansion of the Bank’s presence and network and brand building, still remain. On the other
hand, as a strong and major player in the remittance business with a wide presence overseas
through remittance subsidiaries and tie-ups, the Bank will keep on tapping the country’s middle
class, overseas Filipino workers (OFWs) and the small and medium enterprises (SMEs).
Additionally, the Bank would continue to invest in technology and people as it plans to open more
business centers per year and ATMs in the next three to five years and hire young, dedicated and
competent people. RCBC continues to be in the market for well-managed mid-sized commercial
banks and thrift banks which may enable the Bank to increase its resource base and expand its
branch network and reach in a cost-efficient manner.

Consolidated total resources grew by 12.20% to P268.270 billion at the end of 2008 for a
P29.172 billion increase from the P239.098 billion in 2007. The P29.172 billion expansion in total
assets was mainly due to the increase in cash and other cash items – 15.87%, loans and other
receivables-net – 40.28% and bank premises, furniture, fixtures and equipment - 15.01%. This
was offset, however, by the drop in deposits maintained with the Bangko Sentral – 6.93%,
trading and investment securities – 27.52%, investment properties – 4.82% and deferred tax
assets - 15.44%. Accounting for 6.11% of total assets, deposits with the Bangko Sentral went
down by P1.220 billion mainly due to the decrease in reserve requirement by 200 hundred basis
points from 21% in 2007 to 19% in 2008. Total investment securities, which represents 17.45%
of total resources, has declined by 27.52% comprising of Financial assets at fair value through
profit or loss (FVTPL) – 65.49%, Held-to-maturity investments (HTM) – 7.71% and Available for
sale securities (AFS) – 8.46% of total resources. The huge drop in FVTPL and AFS of 65.49%
(P6.522 billion) and 58.44% (P31.925 billion), respectively, was mainly due to losses from
marking these assets to market and reclassifications to HTM account with carrying value of
P20.674 billion representing 7.71% of total resources.

In October 2008, the International Accounting Standards Board (IASB) issued amendments to
IAS 39: Financial Instruments: Recognition and Measurement and International Financial
Reporting Standards (IFRS) 7: Financial Instruments: Disclosures allowing the reclassifications of
investments out of FVTPL category except derivatives and financial instruments designated at fair
value through profit or loss (DFVTPL). Additionally, instruments which would have met the
definition of loans and receivables can be reclassified out of FVTPL or AFS if the entity had the
intent and the ability to hold the financial asset for the foreseeable future or until maturity.
Reclassifications out of FVTPL category should be done only in rare circumstances. The
amendments are applicable in a partially retrospective manner up to July 1, 2008 provided that
the reclassification was made on or before November 15, 2008. These amendments were
adopted by the Financial Reporting Standards Council (FRSC), the local counterpart of IASB.
Likewise, the Bangko Sentral ng Pilipinas (BSP) has issued Circular No. 628 outlining the
prudential reporting guidelines for banks. On February 2, 2009, the SEC approved the adoption of
BSP Circular 628 as being compliant with generally accepted accounting principles for banks. The
Bank’s reclassifications made in 2008 were in accordance with the provisions of IAS/PAS 39 and
IFRS/PFRS 7, as amended and BSP Circular 628. A more comprehensive discussion and
disclosures with regard to reclassification of financial instruments are presented on the Notes to
Financial Statements, more particularly Notes 2, 8, 9, 10 and 11. Representing 61.28% of total
resources as of year-end, total net loans and other receivables increased by 40.28% or P47.208
billion from the P117.195 billion in 2007 to P164.403 billion last year. The said increase was
- page 9 -

driven by higher loan volumes to corporate and small and medium enterprises (SMEs) and retail
loans granted by RSB, RCBC’s thrift bank subsidiary.

The significant rise in the balance of this account is also on account of the P12.178 increase in
interbank loan receivable and P6.622 billion worth of financial assets previously classified as AFS
to Unquoted debts classified as loans (UDSCL), part of loans and receivables account, as
discussed in the preceding paragraph. Bank premises, furniture, fixtures and equipment
registered a 15.01% increase or P 525.953 million from P3.504 billion to P4.030 billion arising
from the Bank’s aggressive branch expansion as part of its long-term plan to increase its resource
base and expand its branch network. In 2008, the Parent Bank opened twenty (20) new business
centers, deployed fifty eight (58) new ATMs, and piloted foreign exchange booths and E-biz
centers. The Bank has also completed its "computer refresh" program during the year wherein
new personal computers were acquired to replace older less efficient units.

Investment properties decreased from P7.761 billion to P7.388 billion, or by 4.82%, as the Bank
aggressively pursued the disposition and/or sale of acquired real estate properties through
negotiated sales and auctions. Reduction in the carrying value of Deferred tax assets by 15.44%
or P254.059 million was due to write-offs of receivables made by subsidiaries resulting to the
corresponding reversal of related deferred tax assets.

Sources of funds came mainly from interest bearing liabilities that grew by 15.57% or P31.066
billion to P230.624 billion. Outstanding acceptances payable increased by 35.87% or P84.19
million while accrued taxes, interest and other taxes and other liabilities declined by P300.054
million or 9.72% and P294.397 million or by 4.09%, respectively. Capital funds declined by
4.77% from P29.020 billion to P27.637 billion.

Deposit liabilities at P196.227 billion grew by 11.54% from P175.929 billion. Peso and foreign
currency-denominated deposits expanded, in spite of the continued appreciation of the peso and
low interest rates, and were used to fund the growth in total loans. The building of a strong sales
culture across the Bank and various deposit products and services launched to target not only
niche clients but also potential clients with average incomes and those working and living
overseas contributed to the substantial growth in deposits. Accordingly, demand, savings and
time deposits went up by 3.34%, 13.43% and 11.15% respectively. The 67.33% increase in bills
payable from P12.820 billion to P21.453 billion was due to higher foreign currency denominated
borrowings. Likewise, the peso equivalent of the outstanding bond issue as of December 31,
2008 and 2007 has amounted to P6,002,821 and P5,650,670, respectively, with an increase of
6.23% or P352.151 million mainly due to the higher peso/dollar exchange rate at year-end.

Accruals of interest, taxes and other expenses decreased to P2.787 billion or by 9.72% from the
previous year of P3.088 billion due to large volume of time deposits whose interest payments
coincide at year-end and lower expense accruals as a result of the Bank’s effort to cut costs. The
Bangko Sentral’s Monetary Board, in its Resolution No. 89 dated January 24, 2008, approved the
Bank’s planned offering of tier 2 notes of up to P7 billion. The notes would qualify as Lower Tier
2 capital and would have a call option after the fifth year, giving the Bank the right but not the
obligation to redeem the notes on that year. The new capital notes will replace RCBC’s existing
Tier 2 capital worth P5 billion issued in 2003, which was redeemed in July

2008. The new capital notes were successfully issued on February 22, 2008. The outstanding
balance of subordinated debt of P6.942 billion represents the carrying value of the new notes
issued in 2008, higher by 34.58% or P1.784 billion year on year.
- page 10 -

Total liabilities accounted for 89.70% of total resources. At 73.15% of total assets, total deposit
liabilities continued to be the Bank’s main source of funding, particularly savings and time
deposits which comprised 28.23% and 40.77 of total resources, respectively. Bills payable
representing 8.00% of total resources is another important source of funding for liquidity
purposes.

The Bank’s consolidated net income of P2.154 billion for the year 2008 primarily accounted for
the 17.42% growth in surplus account. This was, however, offset by the cash dividend payments
to common and preferred shareholders in the total amount of P554.528 million and
dividends/interest payment on hybrid tier 1 securities of P449.465 million.

Total Capital funds attributable to parent company shareholders amounted to P27.681 billion as
at year-end 2008, lower by 5.63% or P1.651 billion from last year’s P29.332 billion. The decline
was caused by net unrealized mark-to-market losses on AFS securities of P1.569 billion, which is
a reversal of last year’s P1.032 billion gains or P2.601 billion decrease in market value year on
year. As previously discussed, interest rates, one of the key drivers of market value, almost
doubled during the year.

Minority interest was 85.80% lower from negative P311.669 million to negative P44.267 million
mainly due to decrease in share of losses due to dilution and on account of the lower percentage
ownership of minority shareholders in the Bank’s credit card subsidiary.

On May 2008, the Bank has finally acquired Merchants Savings and Loan Association, Inc.
(Merchant Bank) from Finman Capital Corporation and the heirs of the late Luis O. Manapat. The
said acquisition was in line with the general strategy of the Bank to focus on acquisitions of small
and medium-sized banks. In relation to the said strategy, the RCBC Board of Directors, in its
special meeting held on February 11, 2009, has approved the establishment of a P375.0 million
shareholder advance facility which will be infused over a three (3)-year period from 2009-2011
and will result in the acquisition by RCBC of JP Laurel Rural Bank. The decision will take effect
upon the final approval by the Monetary Board of the terms of the agreement in line with the
BSP’s program encouraging the creation of stronger banks for a more stable banking system.
This is one of the first major steps taken by RCBC to enter the microfinance business and assist
in the development of small businesses. The JP Laurel Rural Bank has a rich history in serving the
community with the prominent Laurel family of Batangas behind it. The rural bank’s geographic
coverage is an important market for the overall business thrust of RCBC for its various products,
including microfinance. RCBC plans to convert JP Laurel Bank, with its 10-branch network spread
over Batangas, Laguna and Mindoro Occidental, into the Luzon base of its microfinance business
operations.

The Bank’s Board of Directors, in its meeting held dated March 16, 2009, has approved the
purchase of 92,421,320 of RCBC common shares and 18,082,311 RCBC convertible preferred
shares owned by the Spinnaker Group. The said shares will be lodged as Treasury shares for a
temporary period not exceeding six (6) months. Also, the Board of Directors in its meeting held
last March 2009, has approved that 41,993,389 RCBC common shares will be exchanged for a
5.64% equity stake in MICO Equities, Inc.

The Bank currently services its clients through its 324 business centers and extension offices and
380 ATMs nationwide. In 2008, the Bank introduced its cash card or pre-loaded card called RCBC
My Wallet. The card itself is free and does not require any maintaining balance or membership
fee. The RCBC My Wallet has scored a double victory when two big groups, namely, the UST
Alumni Association and the OmniPrime Marketing Incorporated, the ticketing service provider of
- page 11 -

the MRT, has signed up for its services. This effectively opened an opportunity for the bank to
reach to a huge untapped market like schools, utility companies and telecommunication
companies. The RCBC MyWallet has won a Gold Quill Award of Merit from the International
Association of Business Communicators (IABC) under its Economic, Social and Environmental
Development Category.

During the year, there were no known trends, demands, commitments, events or uncertainties
that would have a material impact on the Bank’s liquidity. The Bank does not anticipate having
within the next twelve (12) months any cash flow or liquidity problems. It is not in default or
breach of any note, loan, lease or other indebtedness or financing arrangement. Further, there
are no trade payables that have not been paid within the stated terms.

To the knowledge and/or information of the Bank, there are no events that will trigger a direct or
contingent financial obligation that is material to the company, including any default or
acceleration of an obligation. There were no material off-balance sheet transactions,
arrangements, obligations (including contingent obligations), and other relationships of the
company with unconsolidated entities or other persons created during the reporting period. The
3.96% or P348.92 million decrease in net interest income from P8.819 billion in 2007 was due to
the drop in spreads of peso and foreign currency denominated loans, financial market assets and
credit card receivables. Representing 41.81% of gross revenues, the said drop in spreads were
offset by the growth in interest earning assets, increase in traditional deposits and peso and
foreign currency denominated loans. On the other hand, total interest expense increased by
10.41% as interest on deposits ballooned by 22.33% or P936 million while borrowings went
down by 11.13% or P258 million. As previously mentioned, average interest rate in 2008
increased by 245 basis points year on year.

Accounting for 77.31% of gross revenues is total interest income of P15.660 billion which is
comprised mainly of interest income from loans and receivables and investment securities that
representing 53.74% and 19.71%, respectively, of total income. At 35.49% of gross income,
total interest expense of P7.189 billion consisted of interest on deposit liabilities and bills payable
and other borrowings, representing 25.32% and 10.17% of gross revenues, respectively. Net
income of P2.154 billion accounted for 10.63% of gross income.

At 4.93% of gross revenues, provisioning for impairment losses of P998.49 million was 5.94%
higher year on year from P942.49 million in 2007 attributable to management’s stance that the
setting up of provision for losses should be sustained especially with the continued challenges
facing the economy. To ensure that any possible write-down that may result from its exposure to
Lehman Brothers is fully provided for, the Bank has allocated approximately P1.0 billion from its
current excess reserves. This provisioning has no adverse effect on the Bank’s capital base. Other
income of P4.597 billion accounted for 22.69% of gross income, mainly consisting of foreign
exchange gains (losses)-net – 4.21%, service fees – 8.11% and commissions and other income –
9.89% of the total revenues. The 138.52% or P1.841 billion drop in trading and securities gain-
net, was offset by the growth in foreign exchange gains (losses) net – 642.28% or P1.009 billion,
commissions and other income – 73.07% or P845.66 million, equity in earnings of associates -
14.88% or P52 million, trust fees - 11.45% or P21 million and service fees - 8.51% or P129
million. Other income went up by 4.93% from P4.381 billion.
On the other hand, increase on foreign exchange gains was due to the depreciation of peso by
15.12% or P6.24 from P41.28 to P47.52 year on year.

Operating expenses of P8.976 billion, representing 44.31% of gross income, was 9.89% or
P807.95 million higher than the previous year of P8.168 billion. The 5.89% or P141 million
- page 12 -

increase in manpower costs from P2.384 billion was basically due to the impact of officers and
CBA increases, contribution to retirement fund and the Merchant Bank manpower cost. The
impact of soaring oil prices and uncertainties in both local and global economies has pushed
prices and the costs of doing business upward. Hence, occupancy and equipment-related
expenses moved up by 5.81% from P1.411 billion. Additionally, taxes and licenses and
depreciation and amortization went up by 6.98% and 29.34%, respectively. With the continued
thrust to provide new and improved products and services, investments in information
technology are on going. Additionally, renovation and improvements of existing physical facilities
are currently being undertaken. Hence, depreciation and amortization expenses were higher in
2008. Manpower costs, occupancy and equipment-related expenses and taxes and licenses
represented 12.47%, 7.37%, and 5.64%, respectively, of total revenues. Miscellaneous operating
expenses, representing 16.82% of gross revenues, went up by 14.00% on account of the
continuous enhancements and/or improvements of the Bank’s communications and information
technology infrastructure in support of its goals. Overall, operating costs during the year were
effectively managed and controlled.

At P919.42 million, provision for tax expense increased by 8.72%, or by P73.77 million, as a
major portion of Bank’s revenues were subjected to final taxes withheld at source. Interest in net
income went down to P19.36 million from P36.03 million as a result of the dilution of minority
stockholders in one of the Bank’s majority-owned subsidiaries. Other than those stated earlier, in
2008, there were no known trends, events or uncertainties that have had or that are reasonably
expected to have a material favorable or unfavorable impact on net revenues from continuing
operations. Similarly, there were no significant elements of income or loss that did not arise from
the Bank’s continuing operations.

Lastly, there were no seasonal aspects that have a material effect on the financial condition or
results of operation of the Bank.

Performance Indicators
    RIZAL COMMERCIAL BANKING CORPORATION and SUBSIDIARIES
                        In Php                                       Consolidated                          Parent
                                                                                          Audited
                                                               2007               2008              2007            2008
    Return on Average Assets (ROA)                             1.42%              0.87%             1.04%           0.56%
    Return on Average Equity (ROE)                            12.43%              7.40%             7.26%           3.50%
    BIS Capital Adequacy Ratio (CAR)                          18.70%              17.30%        18.21%          16.28%


    Non-Performing Loans (NPL) Ratio                           5.27%              2.42%             6.12%           2.54%
    Non-Performing Assets (NPA) Ratio                          6.85%              4.83%             5.20%           3.32%
    Earnings per Share (EPS)*
         Basic                                                  2.93               1.72             1.53            0.70
         Diluted                                                2.84               1.66             1.48            0.67
*
    After giving retroactive effect to the 15% stock dividend s issued in 2007.
- page 13 -




2009.     Philippine GDP in 2009 grew 0.9%, the lowest in 11 years (since 1998), vs. 3.8% in
2008. However, GDP growth in 4Q 2009 improved to a 1-year high of 1.8%, after the global
economy recovered modestly from the worst recession since World War II. The Philippine
economy still managed to grow, though at a relatively slow pace, better vs. other Southeast
Asian economies that fell into recession (such as Thailand, Malaysia, and Singapore). GNP growth
was more than halved to 3.0% vs. 6.2% in 2008.


Inflation averaged 3.2% in 2009, among the lowest in 2 decades, vs. 9.3% in 2008, partly due to
high base effects and slower demand due to the global economic recession. However, inflation
started to pick up from the 22-year low of 0.1% posted in Aug. 2009, on low base effects and
some pick up in the prices of some major global commodities such as oil, consistent with
expectations that the worst of the global recession is over, to be followed by a relatively slow
economic recovery. By Dec. 2009, inflation already reached an 8-month high of 4.4%.


The 91-Day Treasury Bill Rate ended 2009 at 3.89%, vs. 6.12% in end-2008, fundamentally
consistent with lower inflation. The BSP reduced its key overnight interest rate to a record low of
4% since Jul. 2009, down by 2 percentage points from the high of 6% in Nov. 2008, consistent
with the moves of other major global central banks in cutting key short-term interest rates to
record lows, in an effort to stimulate their economies and counteract the adverse effects of the
global recession. Consequently, key Philippine interest rates in the secondary market, as
measured by the PDST yields, mostly lingered near record lows amid huge amounts of excess
market liquidity. Low interest rate environment was maintained, despite the fact that the Budget
Deficit widened to PHP298.5 billion (3.9% of GDP), the worst in 6 years, vs. PHP68.1 billion
(0.9% of GDP) in 2008.


The Peso Exchange Rate appreciated in 2009 by 1.32 Pesos or 2.8% to close at 46.20 vs. 47.52
in the previous year, less than the appreciation in other Southeast Asian currencies (such as the
Indonesian rupiah, Thai baht). Philippine Gross International Reserves (GIR) reached a record
high of US$44.2 billion or equivalent to 9 months worth of imports (nearly triple the 2000 level),
partly due to increased foreign borrowings, higher foreign investments, double-digit growth in
BPO revenues, and continued growth in OFW remittances.


OFW Remittances for 2009 grew by 5.6% to US$17.3 billion, vs. the 13.7% growth posted in
2008, better than earlier expectations and defying the global economic recession. For the month
of December 2009, OFW Remittances grew by 11.4%, the most in 15 months, to a record high of
US$1.6bn.


Exports declined by an average of -22% to US$38 billion in 2009, the worst in 6 years, vs. -2.5%
in 2008. However, exports for the month of Dec. 2009 already grew by 24%, the most in more
than 3 ½ years, as some major export markets emerged from recession. Imports fell by -24% to
US$43 billion in 2009, the lowest in 6 years (since 2003), but already grew in Dec. 2009 by 18%,
the most in 22 months, partly due to low base effects and consistent with the pickup in exports.
Trade deficit for 2009 narrowed to –US$4.7 billion, compared to –US$7.7 billion in 2008, thereby
translating to less outflows of foreign currency from the country.
- page 14 -


Performance Indicators
 RIZAL COMMERCIAL BANKING CORPORATION and SUBSIDIARIES
               In Php                      Consolidated                       Parent
                                                            Audited
                                       2008            2009           2008             2009
 Return on Average Assets (ROA)        0.87%           1.24%          0.56%            1.16%
 Return on Average Equity (ROE)        7.40%          11.95%          3.50%        10.46%
 BIS Capital Adequacy Ratio           17.30%          18.47%          16.28%       17.23%
 (CAR)

 Non-Performing Loans (NPL)            2.42%           3.75%          2.54%            2.93%
 Ratio
 Non-Performing Assets (NPA)
 Ratio
                                       4.83%           4.40%          3.32%            5.68%
 Earnings per Share (EPS)
     Basic                              1.72            3.13           0.70            2.30
     Diluted                            1.66            3.06           0.67            2.25

RCBC registered strong performance in 2009 with significant improvements in financial results
and operations. RCBC showed growth in Assets of P20 billion to P289 billion and Deposits of P24
billion to P220 billion. Net Income grew to P3.33 billion in 2009 from P2.15 billion in 2008.
Operating Income expanded by 24% to P16.2 billion. Net Interest Income increased by 21% or
P1.8 billion to P10.3 billion as reflected by growth in the bank’s core loan business and an
improvement in Net Interest Margin. Non-Interest Income’s growth of 28% was mainly due to
Trading gains. Service fees, trust fees, and commissions and other Income, which totalled P3.0
billion, contributed 50% to total Non-Interest Income. Efficient operating cost management
resulted in an improvement in the bank’s Cost to Income ratio from 69% to 61%.


RCBC registered strong performance in 2009 with significant improvements in financial results
and operations. RCBC showed growth in Assets of P20 billion to P289 billion and Deposits of P24
billion to P220 billion. Net Income grew to P3.33 billion in 2009 from P2.15 billion in 2008.
Operating Income expanded by 24% to P16.2 billion. Net Interest Income increased by 21% or
P1.8 billion to P10.3 billion as reflected by growth in the bank’s core loan business and an
improvement in Net Interest Margin. Non-Interest Income’s growth of 28% was mainly due to
Trading gains. Service fees, trust fees, and commissions and other Income, which totalled P3.0
billion, contributed 50% to total Non-Interest Income. Efficient operating cost management
resulted in an improvement in the bank’s Cost to Income ratio from 69% to 61%.


RCBC continues to be in the market for well-managed mid-sized commercial banks and thrift
banks which will enable the Bank to increase its resource base and expand its branch network
and reach in a cost-efficient manner. Consolidated total resources grew by 7.55% to P288.516
- page 15 -

billion at the end of 2009 for a P20.245 billion increase from the P268.270 billion in 2008. The
P20.245 billion expansion in total assets was mainly due to the increase in trading and
investment securities – 75.23%, bank premises, furniture, fixtures and equipment – 17.98%,
deposits maintained with the Bangko Sentral – 17.88%, and other resources – 12.76%. This was
offset, however, by the drop in, due from other banks – 36.92.%, investment properties –
31.42% and investments in subsidiaries and associates – 6.34%.

Accounting for 6.70% of total assets, deposits with the Bangko Sentral went up by P2.930 billion
mainly due to the increase in peso deposits. Total investment securities, which represents
22.79% of total resources, has grown by 40.49% comprising of financial assets at fair value
through profit or loss (FVTPL) – 3.26%, Held-to-maturity investments (HTM) – 6.92% and
Available for sale securities (AFS) – 12.61% of total resources. The huge rise in FVTPL and AFS
of 173.95% (P5.979 billion) and 60.28% (P13.684 billion), respectively, was funded by the
growth in deposits. Total net loans and other receivables amounting to P164.892 billion
represented 57.15% of total resources.

 Bank premises, furniture, fixtures and equipment registered a 17.98% increase or P 724 million
from P4.030 billion to P4.754 billion arising from the Bank’s aggressive branch expansion. In
2009, the Parent Bank opened fourteen (14) new business centers, deployed ninety one (91)
new ATMs, and piloted foreign exchange booths and E-biz centers. The Bank has also completed
its "computer refresh" program during the year wherein new personal computers were acquired
to replace older less efficient units.

Investment properties decreased from P7.388 billion to P5.067 billion, or by 31.42%. P2.70 billion
was just reclassified to other resources. Without the reclassification, there was an increase of
P379 million.

Sources of funds came mainly from interest bearing liabilities that grew by 7.20% or P17.337
billion to P257.971 billion. Accrued taxes, interest, and other expenses payable increased by
P462.398 million or 16.59%. Capital funds grew by 10.52% from P27.637 billion to P30.545
billion. Deposit liabilities at P220.278 billion grew by 12.26% from P196.227 billion. Peso and
foreign currency-denominated deposits expanded and were used to fund the growth in
investment securities. The building of a strong sales culture across the Bank covering various
deposit products and services launched to target not only niche clients but also potential clients
with average incomes and those working and living overseas contributed to the substantial
growth in deposits. Accordingly, savings and time deposits went up by 23.55% and 5.77%
respectively. Bills payable declined by 49.75% from P21.453 billion to P10.781 billion.

On April 2, 2009, the BSP approved the issuance of P4.0Bn Lower Tier 2 Unsecured Subordinated
Notes which were successfully issued on May 15, 2009 bearing a coupon rate of 7.75%. The
notes have a maturity of 10 years, with a call option at the end of the fifth year and subject to a
step-up interest rate feature. The Bank may redeem the notes in whole, but not in part, at 100%
of the principal plus accrued and unpaid interest at the end of the fifth year, subject to BSP
approval. On October 27, 2009, the two series of Lower Tier 2 Unsecured Subordinated Notes
worth a total of P11.0Bn were listed in the Philippine Dealing and Exchange Corporation. As a
result of the new issuance, Subordinated Debt rose by 57.41% or P3.985 billion from P6.942
billion to P10.927 billion.

Total liabilities accounted for 89.41% of total resources. At 76.35% of total assets, total deposit
liabilities continued to be the Bank’s main source of funding, particularly savings and time
deposits which comprised 32.43% and 40.09% of total resources, respectively. Surplus account
- page 16 -

increased by 22.28% from P7.626 billion to P9.325 billion, spurred by the growth in the Bank’s
consolidated net income by 54.54% from P2.154 billion in 2008 to P3.328 billion in 2009. This
growth was achieved despite the cash dividend payments to common and preferred shareholders
in the total amount of P314.670 million and dividends/interest payment on hybrid tier 1 securities
of P471.161 million.

Total Capital funds attributable to parent company shareholders amounted to P30.549 billion at
year-end 2009, higher by 10.36% or P2.868 billion from last year’s P27.681 billion. Minority
interest improved by 90.32% from negative P44.271 million to negative P4.287 million mainly
due to profitable operations of the subsidiaries during the year. In relation to the strategy
towards microfinance business, the RCBC Board of Directors, in its special meeting held on
February 11, 2009, has approved the establishment of a P375.0 million shareholder advance
facility which will be infused over a three (3)-year period from 2009-2011 in relation to the
acquisition by RCBC of JP Laurel Rural Bank. The decision will take effect upon the final approval
by the Monetary

Board of the terms of the agreement in line with the BSP’s program encouraging the creation of
stronger banks for a more stable banking system. This is one of the first major steps taken by
RCBC to enter the microfinance business and assist in the development of small businesses. The
rural bank’s geographic coverage is an important market for the overall business thrust of RCBC
for its various products, including microfinance. RCBC plans to convert JP Laurel Bank, with its
10-branch network spread over Batangas, Laguna and Mindoro Occidental, into the Luzon base
of its microfinance business operations. The BSP approved the Bank’s acquisition of JPL on May
14, 2009.

On March 13, 2009, the Bank purchased 92,421,320 RCBC common shares and 18,082,311
convertible preferred shares of Spinnaker Group.

On 01 September 2009, the Bank received 725,923,568 votes in favor of the proposal for the
reissuance of 41,993,389 RCBC Treasury Shares in exchange for a 5.64% equity stake in MICO
Equities, Inc. The said votes represented 77.368% of the outstanding 870,421,715 common
shares and 67,851,213 preferred shares entitled to vote as of record date 30 June 2009. The
share swap was booked by the Bank on September 30, 2009.

During the year, there were no known trends, demands, commitments, events or uncertainties
that would have a material impact on the Bank’s liquidity. The Bank does not anticipate having
within the next twelve (12) months any cash flow or liquidity problems. It is not in default or
breach of any note, loan, lease or other indebtedness or financing arrangement. Further, there
are no trade payables that have not been paid within the stated terms.

To the knowledge and/or information of the Bank, there are no events that will trigger a direct or
contingent financial obligation that is material to the company, including any default or
acceleration of an obligation. There were no material off-balance sheet transactions,
arrangements, obligations (including contingent obligations), and other relationships of the
company with unconsolidated entities or other persons created during the reporting period. The
21.22% or P1.798 billion increase in net interest income from P8.470 billion in 2008 to P10.268
billion in 2009 was due to the rise in spreads of peso and foreign currency denominated loans,
financial market assets and credit card receivables. Representing 45.32% of gross revenues, the
said rise in spreads were aided by the growth in interest earning assets and increase in
traditional deposits. On the other hand, total interest expense decreased by 9.56% as interest on
deposits declined by 8.04% or P412 million while borrowings went down by 13.33% or P275
- page 17 -

million. The benchmark 91-d Tbill average in 2009 decreased by 44 basis points year on year
from 4.68% in 2008 to 4.24% in 2009.


Accounting for 74.02% of gross revenues is total interest income of P16.770 billion which is
comprised mainly of interest income from loans and receivables and investment securities that
representing 53.45% and 17.48%, respectively, of total income. At 28.70% of gross income,
total interest expense of P6.502 billion consisted of interest on deposit liabilities and bills payable
and other borrowings, representing 20.82% and 7.88% of gross revenues, respectively. Net
income of P3.328 billion accounted for 14.69% of gross income.

At 9.90% of gross revenues, provisioning for impairment losses of P2.243 billion was 124.66%
higher year on year from P998.492 million in 2008 attributable to management’s stance that the
setting up of provision for losses should be sustained especially with the continued uncertainties
facing the economy.

Other income of P5.886 billion accounted for 25.98% of gross income, mainly consisting of
trading and securities gain-net – 9.94%, foreign exchange gains (losses)-net – 2.18%, service
fees – 7.12% and commissions and other income – 5.02% of the total revenues. The 540.05% or
P2.765 billion increase in trading and securities gain-net, was offset by the decline in foreign
exchange gains (losses) net – 42.05% or P358.245 million, commissions and other income –
43.19% or P865.029 million, trust fees - 12.07% or P24.866 million, service fees - 1.81% or
P29.743 million, and equity in net earnings of associate – 48.82% or P197.335 million. Total
other income went up by 28.05% or P1.290 billion from P4.597 billion.

Operating expenses of P9.831 billion, representing 43.39% of gross income, was 9.52% or
P854.940 million higher than the previous year of P8.976 billion. The 10.07% or P254 million
increase in manpower costs from P2.525 billion was basically due to the impact of officers and
CBA increases amounting to P3.52 million and additional manpower mainly for the new business
centers. Occupancy and equipment-related expenses moved up by 10.61% from P1.493 billion to
P1.651 billion as a result of business expansion and computer equipment upgrade. Additionally,
taxes and licenses and depreciation and amortization went up by 6.67% and 30.87%,
respectively.

With the continued thrust to provide new and improved products and services, investments in
information technology are on-going. Additionally, renovation and improvements of existing
physical facilities done in 2009 resulted in higher depreciation and amortization expenses.
Manpower costs, occupancy and equipment-related expenses and taxes and licenses represented
12.27%, 7.29%, and 5.38%, respectively, of total revenues. Miscellaneous operating expenses,
representing 16.10% of gross revenues, reached P3.647 billion. Overall, operating costs during
the year were effectively managed and controlled.

At P744.42 million, provision for tax expense decreased by 19.03%, or by P175 million, mainly
due to the reduction in tax rate in 2009 from 35% to 30%. Minority interest in net income went
down from P19.365 million to P7.32 million as a result of lower net income of one of the Bank’s
not wholly owned subsidiaries.

Other than those stated earlier, in 2009, there were no known trends, events or uncertainties
that have had or that are reasonably expected to have a material favorable or unfavorable impact
on net revenues from continuing operations.
- page 18 -

Similarly, there were no significant elements of income or loss that did not arise from the Bank’s
continuing operations.

Lastly, there were no seasonal aspects that have a material effect on the financial condition or
results of operation of the Bank.

Notes to the Computations:

1. Parent Company, RSB and MB ROA and ROE ratios were taken from the corresponding
   audited financial statements. ROA ratio of the other subsidiaries was determined based on
   the average of the quarterly ending balances of total assets, audited and/or unaudited. ROE
   ratio of the other subsidiaries was likewise computed based on the average of the quarterly
   ending balances of total equity, audited and/or unaudited.
2. CAR covers combined credit, market and operational risks. Where the BIS CAR was not
   computed, the simple Capital to Total Assets ratio formula was used.
3. NPL ratio is determined by using the following formula: (Total NPLs net of NPLs fully covered
   by allowance for losses) / (Total loan portfolio net of NPLs fully covered by allowance for
   losses).
4. NPA ratio is determined by using the following formula: (Net NPLs + Net ROPA) / Total
   Assets.
5. For some subsidiaries, the NPL/NPA ratios were not computed since these ratios were not
   applicable.

Prospects for Year 2010

For 2010, the Bank’s strategy would be sustaining the momentum for growth. Its focus would be
to improve revenue generation, boost operational efficiency, and build up the clientele and
deposit base.

Revenue generation is expected to come through expansion in the Bank’s core business of
lending and deposits. Focus will be in growing the loan portfolio while enhancing quality with
special attention to small and medium enterprises and the consumer segment. The Bank also
aims to grow its non-interest income from the Bank’s fee-based businesses such as Trust,
Investment Banking, Remittance, and Retail Banking through new product development and
improved services.

The Bank places great emphasis on the value of technology and human resources. The Bank will
continue to build on the needed technological infrastructure such as the setting up of the Core
Banking system and improvement of the retail internet platform to provide more efficient
operations and more convenient electronic banking services. The Bank will still pursue the
broadening of the skill base and expertise of its current manpower complement, supported by an
organizational structure and policies to guide the use and development of human resources. This
is in the context of continued vigilance in risk management.

The Bank will keep on building up its client base as it aims to target 5 million customers in the
medium to long term. This will be done through continued branch, ATM, electronic network
expansion, and product innovation. The Bank intends to adopt a 2-ATM per branch strategy to
reduce over-the-counter transactions and allow bank personnel to deal with more market-
oriented activities such as opening of loans and deposit accounts. There will be a vigorous focus
in promoting electronic banking channels and cash management service of the Bank especially in
the small and medium enterprises. The Bank’s thrust in expanding the consumer clientele will be
- page 19 -

carried out through its savings bank and microfinance arms. As a result of these, growth in
deposits especially low-cost, is also expected from its various programs.

Key Variable and Other Qualitative and Quantitative Factors/Notes to Financial
Statements of March 31, 2010

Accounting Policies and Methods of Computation. There were no changes in the accounting
policies and methods of computation followed in the interim financial statements as compared
with the most recent annual financial statements.

Seasonality or Cyclicality of Interim Operations. Seasonal or cyclical events and/or conditions do
not affect the year-round operations of the Bank.

Changes in Estimates of Amounts Reported. There were no changes in estimates of amounts
reported in prior interim periods of the current financial year or in estimates of amounts reported
in prior financial years.

Issuances, Repurchases and Repayments of Debt and Equity Securities. The BSP through the
Monetary Board approved on March 12, 2010 the Bank’s application to issue P5.0 billion long-
term negotiable certificates of deposit which were issued on May 5, 2010. The LTNCD will have a
maturity of five and a half years and was offered in two series, coupon-bearing carrying a rate of
6.50% per annum issued at 100% of face value and zero coupon carrying a yield-to-maturity of
6.75% issued at 69.20% of face value.

On February 08, 2010, the Bank issued $250 million dollar senior notes. The notes will mature on
February 9, 2015 and bear interest at the rate of 6.25% per annum. Part of the proceeds from
the issue was used to pay off the previously remaining $126 million dollar senior notes issued on
February 23, 2005 which matured on February 24, 2010.

Dividends Paid for Ordinary or Other Shares. In its meeting held on March 29, 2010, the Board of
Directors approved the declaration and payment of cash dividends, which was approved by
Bangko Sentral on April 26, 2010, amounting to P0.60 per share or approximately P564.073
million payable to holders of Common Class shares, and approximately P1.573 million payable to
holders of Preferred Class shares, both paid on May 12, 2010.

The Board also approved on January 25, 2010 the declaration and payment of cash dividends for
the Bank’s convertible preferred shares amounting to P0.0563 per share or a total of P143
thousand, which was approved by the Bangko Sentral on April 26, 2010 and paid on May 11,
2010.

In addition, in its meeting held on September 28, 2009, the Board of Directors approved the
declaration and payment of cash dividends, which was approved by Bangko Sentral on April 26,
2010, amounting to P218.385 million paid to holders of Hybrid Tier 1 securities on April 27, 2010.

The details of the first quarter 2010 cash dividend distributions are as follows (amounts in
thousands except per share figures):
- page 20 -


        Date                  Dividend                     Date           Date          Nature of
      Declared             Per           Total           Approved         Paid          Securities
                         Share         Amount             By BSP
      01.26.09           0.0881         5.978            04.16.09     05.08.09         Preferred stock
      03.30.09           0.0824         5.589            06.10.09     07.03.09         Preferred stock
      03.30.09           0.3060         20.762           06.10.09     07.03.09         Preferred stock
      03.30.09           0.3060        266.349           06.10.09     07.13.09         Common stock
      06.29.09           0.0667         4.524            09.01.09     09.10.09         Preferred stock
      09.28.09           0.0579         3.931            12.07.09     01.05.10         Preferred stock
      09.28.09              *          218.385           04.26.10     04.27.10           Hybrid Tier
      01.25.10           0.0563          143             04.26.10     05.11.10         Preferred stock
      03.29.10            0.60         564.073           04.26.10     05.12.10         Common stock
      03.29.10            0.60          1.573            04.26.10     05.12.10         Preferred stock
        *cash dividends on Hybrid Perpetual Securities

Segment Information. The following table presents revenues and expenses of the Parent
Company that are directly attributable to primary business segments for the quarter ended March
31, 2010 (in millions).

                                             Retail        Corporate       Treasury    Others     Total
                                            Banking         Banking         / Trust
                                             Group           Group
     Results of Operations
     Net interest income                         1,004              465          346     (126)       1,689
     Non-interest income                           484              302          607        99       1,492
     Total revenue                               1,488              767          953      (27)       3,181
     Non-interest expense                        1,014              210          102       745       2,072
     Income (loss) before                          474              557          850     (772)       1,109
       Income tax
     Income tax provision                                                                  134           134
     Net income (loss)                             474              557          850     (906)           975

Material Events Subsequent to the End of the Interim Period Not Reflected in the Financial
Statements. There were no material events subsequent to the end of the interim period that
have not been reflected in the financial statements for the interim period.

Changes in Composition of the Issuer During the Interim Period. During the interim period, there
were no changes in the composition of the issuer including business combinations, acquisition or
disposal of subsidiaries and long-term investments, restructurings and discontinued operations.

Changes in Contingent Liabilities or Contingent Assets. There were no changes in contingent
liabilities or contingent assets since the last annual balance sheet date.

Material Contingencies and Any Other Events or Transactions.      There exists no a material
contingency and any other events or transactions that are material to an understanding of the
current interim period.
- page 21 -

Performance Indicators

The following basic ratios measure the financial performance of the Bank and its consolidated
subsidiaries:

                                         Consolidated                     Parent
                                     Unaudited    Audited          Unaudited   Audited
                                     March 31, December            March 31, December
                                       2010      31, 2009            2010      31, 2009
     Return on Average Assets           1.42%*       1.24%             1.30%       1.14%
     (ROA) 1/                            0.35%                         0.32%
     Return on Average Equity           13.46%      11.95%            11.91%     10.46%
     (ROE) 2/                            3.32%                         2.94%
     BIS Capital Adequacy Ratio         18.22%      18.47%            16.68%     17.23%
     3/

     Non-Performing        Loans           4.50%         3.75%          4.19%         2.93%
     (NPL) Ratio 4/
     Non-Performing       Assets           4.71%         4.40%          3.63%         5.68%
     (NPA) Ratio 5/
     Earnings per share (EPS) 6/
       Basic                                 3.74          3.13           2.75            2.30
       Diluted                               3.73          3.06           2.74            2.25
          * Annualized

1/
        Average assets for the consolidated and parent ratios were computed based on the 3-
month average of end of month balances of total assets. Unaudited net income for the 3-month
period ended March 31, 2010 in the amount of P975 million and P746 million represented the
consolidated and parent net income, respectively.
2/
        Average equity for the consolidated and parent ratios were, likewise, computed based on
the 3-month average of end of month balances. Unaudited net income for the 3-month period
ended March 31, 2010 in the amount of P975 million and P746 million represented the
consolidated and parent net income, respectively.
3/
        Risk-based capital adequacy ratio was determined based on BSP Circular No. 538 and
covers combined credit risk, market risk and operational risk.
4/
          Non-performing loans (NPLs) were net of accounts fully provided with valuation reserves.
5/
          NPLs net of accounts fully provided with allowance for losses plus gross ROPA
6/
       Total weighted average number of issued and outstanding common shares (diluted) as of
March 31, 2010 – 941,082,952 shares; as of December 31, 2009 – 928,453,865 shares.
- page 22 -


(C) Financial Statements

RIZAL COMMERCIAL BANKING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CONDITION
(Amounts in Thousand)                      (Unaudited)                         (Audited)
                                                                               December
                                                              March 31            31,
                                                               2010              2009
                      ASSETS
Cash and Other Cash Items                                P    4,862,572    P   6,811,443
Due From Bangko Sentral ng Pilipinas                         18,393,990        19,321,339
Due From Other Banks                                          2,410,342        3,066,922
Investment Securities

 Financial Assets at Fair Value Through Profit or Loss       10,133,905         9,415,889
 Held-to-Maturity Investments                                19,140,298        19,962,360
 Available for Sale Securities                               45,205,063        36,384,430
Loans and Receivables, net                                   154,127,883       164,892,417

Investments in Subsidiaries and Associates, net               3,707,229         4,021,767

Bank Premises, Furniture, Fixtures & Equipment, net            4,887,050        4,754,121
Investment Property, net                                       5,032,824        5,066,543
Deferred Tax Assets                                            1,435,048        1,408,302
Other Resources, net                                          13,512,584       13,410,044
TOTAL RESOURCES                                          P   282,848,789   P   288,515,577

         LIABILITIES AND CAPITAL FUNDS
Deposit Liabilities
 Demand Deposits                                         P    11,088,362   P   11,034,257
 Savings Deposits                                             95,103,322       93,571,654
 Time Deposits                                                95,590,901       115,671,983
  Total Deposit Liabilities                              P   201,782,585   P   220,277,894
Bills Payable                                                 16,070,251       10,780,964
Bonds Payable                                                 11,292,500        5,836,076
Outstanding Acceptances Payable                                439,289           250,421
Due to Other Banks                                             404,345            21,042

Accrued Taxes, Interest and Other Expenses Payable             3,148,563        3,249,854
Other Liabilities                                              7,407,842        6,627,433
Subordinated Debt                                             10,888,809       10,926,978
TOTAL LIABILITIES                                        P   251,434,183   P   257,970,663

Capital Funds

 Attributable to Parent Company Shareholders:
 Preferred Stock                                              207,038           207,038
- page 23 -

     Common Stock                                                            9,905,508         9,905,508
     Hybrid Perpetual Securities                                             4,883,139         4,883,139
     Capital Paid in Excess of Par                                           6,039,794         6,039,794
     Treasury Shares, at Cost                                                (952,709 )        (952,709 )

     Revaluation Reserves on Available-for-sale Securities                    550,285           407,015

     Revaluation Increment in Property of an Associate                         58,917            58,917
     Accumulated Translation Adjustment                                        91,251            97,771
     Reserve for Trust Business                                               287,048           285,724
     Other Reserves                                                          (240,889 )        (240,889 )

     Share in Additional Paid-in Capital of an Associate                       532,583           532,583
     Surplus                                                                  10,055,499        9,325,310
                                                                              31,417,465       30,549,201
Minority Interest                                                              (2,860 )          (4,287 )
TOTAL CAPITAL FUNDS                                                           31,414,605       30,544,914
TOTAL LIABILITIES & CAPITAL                                              P   282,848,789   P   288,515,577

1/
     The consolidated financial statements have been prepared in
     conformity with Philippine Financial Reporting Standards (PFRS)
     and reflect amounts that are based on the best estimates and
     informed judgment of management with appropriate consideration to
     materiality.



RIZAL COMMERCIAL BANKING CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Amounts in Thousand except for earnings per share)

                                                                              Jan. 1 to         Jan. 1 to
                                                                               Mar. 31           Mar. 31
                                                                                2010              2009
INTEREST INCOME ON
Loans and receivables                                                        P2,775,071    P    3,041,511
Investment securities                                                         1,151,953         1,027,286
Others                                                                         173,593           220,520
                                                                              4,100,617         4,289,317
INTEREST EXPENSE ON
Deposit liabilities                                                           1,022,635         1,414,256
Bills payable and other borrowings                                             462,368           525,582
                                                                              1,485,003         1,939,839
NET INTEREST INCOME                                                           2,615,614         2,349,479
IMPAIRMENT LOSSES                                                              485,236           238,461
NET INTEREST INCOME AFTER IMPAIRMENT
LOSSES                                                                        2,130,379         2,111,018
OTHER OPERATING INCOME
Trading and securities gain-net                                               515,751            232,749
- page 24 -

Service fees                                       444,613            347,472
Foreign exchange gains (losses)-net                113,722             80,484
Trust fees                                          50,202             44,753
Commissions and other income                       406,261            423,390
                                                  1,530,550          1,128,847
OTHER OPERATING EXPENSES
Employee benefits                                  709,958            674,463
Occupancy & equipment-related                      439,228            411,553
Taxes & Licenses                                   313,270            302,053
Depreciation and amortization                      138,651            114,793
Miscellaneous                                      871,574            749,658
                                                  2,472,682          2,252,519
INCOME BEFORE TAX                                 1,188,247           987,346
TAX EXPENSE                                        211,235            205,367
NET INCOME                                         977,013            781,979
NET INCOME ATTRIBUTABLE TO MINORITY
INTEREST                                            1,723             2,235
NET INCOME ATTRIBUTABLE TO PARENT
COMPANY'S SHAREHOLDERS                             975,289           779,744
Earnings per Share (Annualized)
   Basic                                            P 3.74            P2.70
   Diluted                                          P 3.73            P2.61


RIZAL COMMERCIAL BANKING
CORPORATION
CONSOLIDATED STATEMENTS OF CASH
FLOWS
(Amounts in Thousand)                             Unaudited           Unaudited
                                                   Jan. 1 to           Jan. 1 to
                                                    Mar. 31             Mar. 31
                                                     2010                2009
                                                                      (03.31.09
                                                 (03.31.10 vs.            vs.
                                                   12.31.09)          12.31.08)

CASH FLOWS FROM OPERATING ACTIVITIES
   Income before tax                         P
                                                  1,188,247      P   987,346
   Adjustments for:
      Impairment losses
                                                   485,236           238,461
      Depreciation and amortization
                                                   138,651           114,793
      Amortization of deferred charges
                                                    26,873           13,638
      Equity in net earnings of associates
                                                   (53,030)          (110,531)
- page 25 -

   Operating income before working capital changes
                                                         1,785,977     1,243,706
      Decrease (Increase) in financial assets at fair
      value through profit and loss                      (718,016)     (3,935,988)
      Decrease (Increase) in loans and receivables
                                                        10,279,298     14,218,863
      Decrease (Increase) in investment property
                                                          33,719       2,482,545
      Decrease (Increase) in other resources
                                                         (399,937)     850,509
      Increase (Decrease) in deposit liabilities
                                                        (18,495,309)   4,285,335
      Increase (Decrease) in outstanding
      acceptances payable                                 188,868      (17,488)
      Increase (Decrease) in due to other banks           383,303                 -
      Increase (Decrease) in accrued taxes, interest
      and other expenses                                 (219,485)     (99,960)
      Increase (Decrease) in other liabilities
                                                         6,198,662     (1,272,471)
   Cash generated from (used in) operations
                                                         (962,918)     17,755,052
   Cash paid for taxes
                                                          (93,041)     (129,830)
   Net Cash From (Used in) Operating Activities
                                                        (1,055,960)    17,625,222

CASH FLOWS FROM INVESTING ACTIVITIES
      Decrease (increase) in available-for-sale
      securities                                        (8,677,659)    (10,720,146)
      Decrease (increase) in Held to Maturity
      Investments                                         822,062                 -
      Acquisitions of bank premises, furniture,
      fixtures and equipment (net)                       (271,580)     (185,614)
         Cash dividends received
                                                            220        116,969
         Decrease (increase) in investments in
         subsidiaries and associates                      360,828      (189,693)

         Net Cash From (Used in) Investing
         Activities                                     (7,766,129)    (10,978,484)

CASH FLOWS FROM FINANCING ACTIVITIES
         Proceed from (payments of) bills payable
                                                         5,289,287     (4,989,375)
         Purchase of Treasury shares
                                                            -          (1,594,246)
         Net proceeds from issuance of
         subordinated debt                                  -                     -
         Dividends paid
                                                            -          (11,317)
- page 26 -

         Redemption of bonds payable                         -                       -
         Issuance of common shares                           -                       -

         Net Cash From (Used in) Financing
         Activities                                       5,289,287         (6,594,938)

NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS                                          (3,532,802)       51,799

CASH AND CASH EQUIVALENTS AT
BEGINNING OF YEAR
               Cash and other cash items
                                                          6,811,443         6,807,939
               Due from Bangko Sentral ng Pilipinas
                                                          19,321,339        16,390,973
               Due from other banks
                                                          3,066,922         4,862,225


                                                          29,199,704        28,061,137

CASH AND CASH EQUIVALENTS AT END OF
YEAR
               Cash and other cash items
                                                          4,862,572         4,952,883
               Due from Bangko Sentral ng Pilipinas
                                                          18,393,990        18,373,886
               Due from other banks
                                                          2,410,342         4,786,169



                                                      P                 P
                                                          25,666,904        28,112,938
- page 27 -


RIZAL COMMERCIAL BANKING CORPORATION
STATEMENT OF CHANGES IN EQUITY
(Amounts in Thousands)



                                                            Unaudited       Unaudited
                                                            Jan. 1 to       Jan. 1 to
                                                             Mar. 31         Mar. 31
                                                              2010            2009

ATTRIBUTABLE TO PARENT COMPANY
SHAREHOLDERS
   PREFERRED STOCK
     Balance, beginning                                 P    207,038    P    859,335
     Issuance (Conversion) of preferred stock                   -               -
     Balance,end                                             207,038         859,335

    COMMON STOCK
      Balance, beginning                                    9,905,508       9,628,430
      Conversion of preferred stock to common stock             -               -
      Issuance of common stock                                  -               -
      Balance,end                                           9,905,508       9,628,430



    HYBRID PERPETUAL SECURITIES                             4,883,139       4,883,139

    CAPITAL PAID IN EXCESS OF PAR
      Balance, beginning                                    6,039,794       5,571,906
      Conversion of preferred stock to common stock             -               -
      Issuance of common stock                                  -               -
      Balance,end                                           6,039,794       5,571,906



    TEASURY SHARES, At Cost                                 (952,709)       (1,594,246)

    REVALUATION RESERVE ON AVAILABLE-
    FOR-SALE SECURITIES
      Balance, beginning                                     407,015        (1,568,758)
      Fair value gains (losses) on available-for-sale
      securities, net of tax                                 143,320         760,631
      Balance, end                                           550,335        (808,127)

    REVALUATION INCREMENT IN PROPERTY
    OF AN ASSOCIATE                                          58,917           28,840

    ACCUMULATED TRANSLATION
- page 28 -

    ADJUSTMENTS
      Balance, beginning                                     97,771           83,889
      Translation adjustment during the period               (6,520)          32,127
      Balance, end                                           91,251          116,016

    RESERVE FOR TRUST BUSINESS
      Balance, beginning                                    285,724          276,973
      Transfer from surplus free                             1,324              -
      Balance, end                                          287,048          276,973


    OTHER RESERVES                                          (240,889)        (240,889)

    SHARE IN ADDITIONAL PAID-IN CAPITAL
    OF AN ASSOCIATE                                         532,583          532,583

    SURPLUS FREE
      Balance, beginning
          As previously stated                             9,325,310         7,626,144
          Prior period adjustments                              -                 -
      Net income                                             975,289          779,744
      Cash dividends on common shares                           -                 -
      Cash dividends on preferred shares                        -             (11,317)
      Stock dividend                                            -                 -
      Dividends on Hybrid Capital Securities                    -                 -
      Amortization of deferred charges                      (243,778)             -
      Transfer to reserves for trust business                (1,324)              -
      Balance, end                                         10,055,498        8,394,571

ATTRIBUTABLE TO
    PARENT COMPANY SHAREHOLDERS                            31,417,513       27,648,532

MINORITY INTEREST
     Balance, beginning                                      (4,287)         (44,271)
     Fair value gains (losses) on available-for-sale
     securities, net of tax                                   (296)            (220)
     Decrease in share of losses due to dilution                -                -
     Increase in minority interest due to
     acquisition of a new subsidiary                            -                -
     Net Income (loss) for the year                           1,723           2,235
     Balance, end                                            (2,860)         (42,256)

TOTAL CAPITAL FUNDS                                    P   31,414,654   P   27,606,276
- page 29 -


If material;


(i)     Any known trend, events, or uncertainties (material impact on liquidity)
        There are no known trends, demands, and commitments, events, or uncertainties that
        will have a material impact on Bank’s liquidity


(ii)    Events that will trigger direct or contingent financial obligation that is
        material to the company, including any default or acceleration of an
        obligation.
        To the knowledge and/or information of the Bank, there are no events that will trigger a
        direct or contingent financial obligation that is material to the company, including any
        default or acceleration of an obligation.


(iii)   All material off-balance sheet transactions, arrangements, obligations
        (including contingent obligations), and other relationships of the company
        with unconsolidated entities or other persons created during the reporting
        period.

        There were no material off-balance sheet transactions, arrangements, obligations
        (including contingent obligations), and other relationships of the company with
        unconsolidated entities or other persons created during the reporting period.

(iv)    Commitments and Contingent Liabilities

        To date, the Bank has no material commitment for capital expenditures.

        Likewise, in the normal course of operations of the Bank, there are various outstanding
        commitments and contingent liabilities such as guarantees, commitments to extend
        credit, tax assessment etc., which are not reflected in the accompanying financial
        statements. Management does not anticipate losses from these transactions that will
        adversely affect its operations.

        Several suits and claims also remain unsettled. Management is of the opinion that even
        if these are decided adversely, it will not involve sums that would have material effect on
        its financial position or operating results.

(v)     Any known trend, events or uncertainties (material impact on sales)

        There are no known trends, demands, and commitments, events, or uncertainties that
        will have a material impact on Bank’s sales

(vi)    Any significant Elements of Income or Loss (from continuing operations)

        There were no significant elements of income or loss that did not arise from the bank’s
        continuing operations.
- page 30 -



(vii)   Seasonality Aspects that has material effects on the financial statements

        Seasonal or cyclical events and/or conditions do not affect the year-round operations of
        the Bank.

D. Material Changes from Period to period financial statements (Vertical and
Horizontal Analyses)

31 March 2010 vs. 31 December 2009

Consolidated total resources for the quarter ended March 31, 2010 stood at P282.849 billion,
P5.667 billion lower than yearend’s P288.516 billion.

Cash and other cash items declined by 28.61% from P6.811 billion to P4.863 billion as a result of
a shift to interest earning assets and a more efficient management of CIV levels. Consequently,
Due from BSP, representing 6.50% of total assets, stood at P18.394 billion. Due from other
banks also declined by 21.41% from P3.067 billion to P2.410 billion.

Loans and receivables-net went down by 6.53%, from P164.892 billion to P154.128 billion largely
due to the lower interbank loans outstanding during the period. Loans and receivables-net
accounted for 54.49% of total resources.

Financial assets at fair value through profit or loss increased by 7.63%, from P9.416 billion to
P10.134 billion due to favorable trading conditions. Available for sale (AFS) securities posted a
24.24% growth from P36.384 billion to P45.205 billion as proceeds from the low-yielding
interbank loans and due from other banks were reinvested to higher-yielding securities in light of
better market conditions. Investment securities accounted for 26.33% of total resources. Of
total investment securities, AFS and Held-to-Maturity securities accounted for 15.98% and
6.77%, respectively, of total assets.

Investments in subsidiaries and associates, net went down by 7.82%, from P4.022 billion to
P3.707 billion mainly on account of the redemption of preferred shares of RCBC Realty
amounting to P250 million.

Bills payable increased by 49.06% from P10.781 billion to P16.070 billion due to higher foreign
currency denominated borrowings this period. Bills payable represented 5.68% of total resources.
Bonds payable increased by 93.49% from P5.836 billion to P11.293 billion mainly due to the
issuance of $250 million dollar senior notes in February 2010 . Outstanding acceptances payable
increased by 75.42% from P250 million to P439 million on account of a higher volume of import
bills acceptances under usance that were negotiated during the period. Due to other banks grew
by 1821.62% from P21 million to P404 million due to overdrafts which are temporary in nature.
Other liabilities also went up by 11.78% from P6.627 billion to P7.408 billion on account of
increases in accounts payable and bills purchase-contra account.

Savings deposits and time deposits represented 33.62% and 33.80%, respectively, of total
resources. Total deposit liabilities, which accounted for 71.34% of total resources, declined by
8.40% from P220.278 billion to P201.783 billion. This was mainly due to the decrease in time
deposits which went down by 17.36% from P115.672 billion to P95.591 billion a result of the
deliberate drive to reduce higher cost deposits to improve yields.
- page 31 -


Total liabilities reached P251.434 billion and accounted for 88.89% of total resources.

Revaluation reserves on AFS securities went up by 35.20% from P407 million to P550 million
primarily due to the declining interest rates leading to the appreciation of AFS securities.
Accumulated translation adjustment went down by 6.67% from P98 million to P91 million due to
the appreciation of the peso. The peso dollar exchange rate closed at P45.17 at end March 2010,
2.23% stronger than yearend’s P46.20. The year to date average exchange rate was pegged at
P45.99, a 3.38% appreciation from the previous year’s P47.60 to the US dollar.

 Surplus account was 7.83% higher on account of the P975 million net profits generated for the
first quarter and partially reduced by the cash dividends paid to holders of common, convertible
preferred shares, and HT1 security. Minority interest went down by 33.29% from P4.287 million
to P2.860 million due to lower net income attributable to minority interest of P1.723 million. The
Bank’s capital, excluding minority interest, stood at P31.415 billion and accounted for 11.11% of
total resources.

There are no known trends, demands, and commitments, events, or uncertainties that will have a
material impact on Bank’s liquidity.


31 March 2010 vs. 31 March 2009


RCBC posted a net income of P975 million in the first quarter of 2010, P196 million or 25.08%
higher than the P780 million net income reported for the same period last year. Net income of
P975 million accounted for 17.32% of gross revenues during the period.

Net interest income, representing 46.45% of gross revenues, rose by 11.33% to P2.616 billion.

Interest income of P4.101 billion, accounting for 72.82% of gross income, mainly consisted of
interest income from loans and receivables and investment securities that accounted for 49.28%
and 20.46% of gross revenues, respectively. Interest income from loans went down by 8.76% to
P2.775 billion mainly due to lower yields. Interest income from investment securities grew by
12.14% to P1.152 billion mainly due to higher volume. Other interest income declined by 21.28%
to P173.593 million.

Total interest expense, making up 26.37% of total revenues, consisted of interest on deposit
liabilities, and bills payable and other borrowings which accounted for 18.16% and 8.21% of
gross revenues, respectively. Total interest expense decreased by 23.45% to P1.485 billion, with
interest expense on deposit liabilities going down by 27.69% from P1.414 billion to P1.023 billion
mainly due to the decline in costs and better funding mix. Interest expense on bills payable and
other borrowings also decreased by 12.03% from P525.582 million to P462.368 million.

Provisioning for probable losses this period at P485 million was 103.49% higher year on year and
accounted for 8.62% of gross revenues.
- page 32 -

Accounting for 27.18% of gross revenues, other operating income grew by 35.59% to P1.531
billion driven by the following:

        o     Trust fees went up by 12.18% to P50 million
        o     Foreign exchange gains-net, rose by 41.30% to P114 million owing to the increase in
              volumes of trade transactions
        o     Trading and securities gain-net, increased by 121.59% to P516 million mainly due to
              a sustained favorable trading opportunities
        o     Service fees rose by 27.96% to P445 million

Other operating expenses at P2.473 billion, representing 43.91% of gross revenues, were 9.77%
higher year on year due to the following:

        o     Depreciation and amortization went up by 20.78% to P139 million mainly due to the
              Bank’s investments in information technology to support its thrust to provide new
              products and services as well as improve existing ones and the establishment of
              additional channels to service clients’ needs
        o     Occupancy and equipment-related costs grew by 6.72% to P439 million as a result of
              branch network expansion
        o     Manpower costs increased by 5.26% to P710 million due to additional headcount for
              branch expansion
        o     Miscellaneous expenses went up by 16.26% to P872 million due to business
              expansion
        o     JP Laurel Rural Bank, Inc. was not yet consolidated with the Bank in 1st quarter 2009

Minority interest in net income declined by 22.88% to P1.723 million primarily due to the
curtailed profitability of the Bank’s not wholly-owned subsidiaries for the period as against the
same period last year..

(E) External Audit Fees

External Audit Fees and Services. The Audit Committee is empowered to appoint the external
auditor of the Bank and pre-approve all auditing and non-audit services. It recommends to the
Board the selection of external auditor considering independence and effectiveness and
recommends the fees to be paid.

Statutory and Regulatory Filing
For the audit of the Bank’s annual financial statements and services provided in connection with
statutory and regulatory filings or engagements, the aggregate amount to be billed/billed,
excluding out-of pocket expenses, by its independent accountant amounts/amounted to P4.535
million and P2.15 million for 2009 and 2008, respectively.

Other assurance and related services
Additionally, approximately P4.9 million was paid for other services rendered by the independent
accountant in 2009.

Tax Fees and All Other Fees
Aside from the mentioned, no other tax fees were paid.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. In
connection with the audits of the Bank’s financial statements for the two (2) most recent years
      - page 33 -

     ended December 31, 2008 and 2007, there were no disagreements with Punongbayan and
     Araullo on any matter of accounting principles or practices, financial statement disclosures, audit
     scope or procedure except for the effects on the financial statements of the Group and the
     Parent Company for the applicable years described in the Basis for Qualified Opinion section of
     the Report of the Independent Auditors dated March 30, 2009 which is incorporated as part of
     this report.

     The Members of the Audit Committee are as follows: Atty. Teodoro Q. Pena as Chairman and Mr.
     Roberto F. de Ocampo, Mr. Armando M. Medina, and Mr. Rizalino S. Navarro as Members

     The Audit Committee approved the policies and procedures for the above services

     (G) Directors and Executive Officers

     The directors of the Company are elected at the annual stockholders’ meeting to hold office until
     the next succeeding annual meeting and until their respective successors have been elected and
     qualified. Incumbent directors are:

Name                             Age     Position                  Inclusive Dates              Citizenship
Sec. Alfonso T. Yuchengco        87      Honorary Chairman         May 27, 2002 to present      Filipino
                                         Director                  June 30, 2003 to present
Ms. Helen Y. Dee                 66      Director                  March 28, 2005 to            Filipino
                                                                   present
                                         Chairperson of the        June 27, 2005 to present     Filipino
                                         Board
Mr. Rizalino S. Navarro          71      Director                  Sept. 1, 1999 to present
                                         EVC/Chief        Exec.    June     28,   2004    to
                                         Officer                   January 2005
                                         Chairman of the Board     June 25, 2001 to June
                                                                   28, 2004
Mr. Cesar E. A. Virata           79      Director                  1995 to present              Filipino
                                         Corporate        Vice-    June 22, 2000 to present
                                         Chairman
                                         Acting Chief Executive    January 28, 2002 to
                                         Officer                   June 29, 2003
                                         Chief Executive Officer   June 30, 2003 to June
                                                                   28, 2004
Mr. Lorenzo V. Tan               48      Director                  April 1, 2007 to present     Filipino
                                         EVC/CEO                   February     1,2007     to
                                                                   March 31, 2007
                                         President and CEO         April 1, 2007 to present
Atty. Teodoro D. Regala          76      Director                  June 28, 1999 to present     Filipino
Atty. Wilfrido E. Sanchez        73      Director                  March 27, 2006 to            Filipino
                                                                   present
Atty. Ma. Celia H. Fernandez-    38      Corporate Secretary       March 1, 2005 to present     Filipino
Estavillo
                                         Director                  June 27, 2005 to present
                                         Senior Vice-President     July 01, 2008 to present
Dr. Reynaldo B. Vea              58      Director                  March 30, 2009 to            Filipino
                                                                   present
      - page 34 -

Ms. Yvonne S. Yuchengco          56     Director                June 29, 2009 to present    Filipino
Mr. Armando M. Medina            59     Independent Director    Feb. 26, 2003 to present    Filipino
Atty. Teodoro Q. Pena            78     Director                1995 to Sept., 2002         Filipino
                                        Independent Director    Sept, 2002 to present
Mr. Roberto F. De Ocampo         64     Independent Director    May 29, 2006 to present     Filipino
Mr. Francisco C. Eizmendi, Jr.   73     Independent Director    May 29, 2006 to present     Filipino
Mr. Antonino L. Alindogan, Jr.   70     Independent Director    June 25, 2007 to present    Filipino


     The names, ages and positions of all incumbent executive officers are as follows:

     Executive Vice-Presidents

     Redentor C. Bancod, (Filipino) 46, Executive Vice President and Head of the IT Shared
     Services Group. Previously, he was Vice President & General Manager, Central Systems Asia of
     Sun Life Financial, Asia and Senior Vice President and Chief Technology Officer of Sun Life Of
     Canada (Philippines) Inc. from October 2003 to 2007, Senior Vice President & Chief Information
     Officer of Equitable PCI Bank from July 1996 to September 2003, Assistant Vice President and
     Head of Applications Development in Far East Bank from October 1993 to June 1996, Assistant
     Vice President of Regional Operations, Asia Pacific, of Sequel Concepts, Inc. USA/Ayala Systems
     Technology Inc. from November 1992 to September 1993, Project Manager in Union Bank of
     Switzerland, NA from April 1988 to November 1992 and Chief Designer and Technical Advisor in
     Computer Information System Inc. from March 1984 to April 1998.

     Alfredo S. Del Rosario, Jr., (Filipino) 54, Executive Vice President, is the Head of the Asset
     Management and Remedial Group. He was the Head of the Overseas Filipino Banking Group from
     March 2007 to September 2008 and Head of the Commercial Banking Group from May 2006 to
     February 2007. Prior to joining the Bank, Mr. Del Rosario worked for AB Capital and Investment
     Corporation as Senior Vice President, Trust and Investment Division Head, and Information
     Technology Division Head (from January 2000 to May 2006). He also held directorship positions
     in AB Capital Securities, Inc., Stock Transfer Services, Inc., Araullo University, AB Card
     Corporation and Asianbank Corporation. Furthermore, Mr. Del Rosario previously worked for
     Global Business Bank as Senior Vice President and Branch Banking Group Head, AsianBank as
     Senior Vice President and Branch Banking Division and as Senior Vice President, Human
     Resources and Administration Division, Bank of America as Vice President, Human Resources,
     and for Philippine Airlines, FNCB Finance and the Ayala Group of Companies.

     Jose Emmanuel U. Hilado, (Filipino) 45, Executive Vice President, is the Bank’s Treasurer
     and Head of Treasury Group. Prior to joining RCBC, he was SVP and Head of Trading and
     Investments of Banco de Oro Unibank from July 2007 to September 2008. He also served as
     SVP/Treasurer of BDO Private Bank from September 2003 to June 2007. Prior to this, he held
     various positions in Equitable PCIBank, and Far East Bank and Trust Company.

     Ismael R. Sandig, (Filipino) 56 Executive Vice President, is the Head of RBG. He was a Senior
     Consultant and Assistant to the President from 2005 to 2006 at East West Bank Corporation. He
     also joined Philippine National Bank from 2001 to 2005, where his last appointment was as Retail
     Banking Sector Head and concurrent Consumer Finance Sector Head. He held various positions in
     Retail Banking in Union Bank of the Philippines, PCI Bank and Insular Bank of Asia and America.
- page 35 -


Uy Chun Bing G., (Filipino) 57, Executive Vice President, is the Head of Corporate Banking
Group, formerly the Corporate Business Development Group, a position he has held since 01
January 1997. He is also a Director of the Financial Brokers’ Insurance Agency. Previously, Mr. Uy
was the Head of the Bank’s Binondo Branch and Area Supervisor for Binondo as Senior Vice
President (1989 to 1996), First Vice President (1988 to 1989), Vice President (1987 to 1988) and
the Head of the Divisoria Branch as Vice President (1982 to 1987) and Assistant Vice President
(1980 to 1982).

Elbert M. Zosa, (Filipino) 62, Executive Vice President, has been the Head of the Bank’s
Corporate Planning Group since April 2006. He was formerly Head of Strategic Planning of
Equitable PCI Bank with responsibility over Corporate Planning and Corporate Communications.
He also served in other capacities such as Head of International Services Group where he
spearheaded the development of its remittance business and coordinated its foreign offices. He
also served as Area Head for Marketing and Operations of some branches. He obtained his
Master of Business Administration from the Wharton School, University of Pennsylvania.

First Senior Vice President

Melissa G. Adalia, (Filipino) 57, Senior Vice President, is the Head of the Human Resources
Group. Prior to joining the Bank, Ms. Adalia was Head of Human Resources for Asia United Bank
from March 2001 to April 2006, ABN Amro Bank from 1999 to 2000, Great Pacific Bank in 1999,
Bank of America Savings Bank, Dai-Ichi Group of Companies and SM Shoemart.

Manuel G. Ahyong Jr., (Filipino) 48, Senior Vice President, is the current Head of the Wealth
Management Segment 2 (Makati). Prior to joining the Bank in 2006, he was a Senior Vice
President of Pramerica Financial, Director in Societe Generale, Vice President of Deutsche Bank,
AG; Deputy Manager and Head for Private Banking of Banque Indosuez; and Director for Private
Banking of American Express Bank.

Michael O. de Jesus, (Filipino) 50, is the current Segment Head of Corporate Banking 2. He
has a Bachelor of Arts degree in Economics from Union College in Schenectady, New York and a
Masters in Business Administration (Finance) from The Wharton School, University of
Pennsylvania.

John Thomas G. Deveras, (Filipino) 47, First Senior Vice President, is Head of Strategic
Initiatives. Prior to joining the Bank in May 2007, he was an Investment Officer at International
Finance Corporation. He also worked for PNB Capital and Investment Corporation as President,
and Senior Vice President in PNB Corporate Finance. He holds a degree in Bachelor of Science
degree in Management Engineering from Ateneo de Manila University and earned his Masters
Business Administration from the University of Chicago.

Rommel S. Latinazo, (Filipino) 50, First Senior Vice President, is the Head of the Corporate
Banking Segment 1 under the CBG. He joined the Bank in 2000 as First Vice President.
Previously, he held various positions in Solidbank Corporation, Standard Chartered Bank,
CityTrust Banking Corporation, First Pacific Capital Corporation and Philamlife Insurance
Company.
- page 36 -


Ana Luisa S. Lim, (Filipino) 40, heads the Internal Audit Division of the Bank. She is also a
Director and Corporate Secretary of BEAMExchange, Inc. She joined the Bank in 2000 primarily
to implement the risk-based audit approach under a shared-services set-up in conformity with
the Bank’s strategic risk management initiatives. Ms. Lim is a Certified Public Accountant,
Certified Information Systems Auditor and Certified Internal Auditor.

Cynthia P. Santos, (Filipino) 56, Senior Vice President, is the Head of the Overseas Filipino
Banking/TeleMoney Group. Prior to this position, Ms. Santos was the Head of the Corporate
Planning Group and its Chief Information Officer. She started with RCBC as the Bank Economist.

Edgar B. Villanueva (Filipino), 47, is the Head of Global Transactional Services. Work
experience includes Business Development Manager/Vice-President of Bank of America from 2006
to 2009, Head of Client Management for North America for ABN AMRO Bank NV from 2004 to
2009, among others. He earned his Bachelor’s Degree in Business Economics from De La Salle
University and Master’s Degree in Business Administration from J.L. Kellog Graduate School of
Management in Illinois.

Senior Vice-Presidents

Marcelo E. Ayes, (Filipino) 57, Senior Vice President, is the Head of Treasury’s Financial
Institution Management Division (FIMD). Prior to joining the Bank, Mr. Ayes was First Vice
President and Chief Dealer and Head of the Proprietary Trading Division at Equitable PCI Bank
from 2001 to September 2006, and Head of the Treasury Marketing and Product Development
Group from 1998 to 2001. Mr. Ayes also held various positions in the Philippine National Bank
from 1978 to 1997, including a four-year term in Singapore and a five-and-a half-year term in
Hong Kong.

Angelito C. Cruz, (Filipino), 60, Senior Vice-President, is currently the Segment Head of Japan
Desk/Ecozone. He graduated from University of the East with a degree in Business
Administration.

Rafael Aloysius M. Dayrit (Filipino) 53, is the Bank's Chief Credit Officer and Head of the
Credit Risk Division. He graduated from the University of the Philippines with a Bachelors of
Science in Agribusiness and Masters in Business Administration. He was a fellow of the Hubert H.
Humphrey scholarship program in Agricultural Economics at the University of California, Davis,
USA. Mr. Dayrit is currently a Director of the Professional Risk Managers International Association
(PRMIA Philippine Chapter), a non-profit professional association of risk practitioners with
members in 190 countries. Prior to joining RCBC, he has worked in three other universal banks,
namely, Solidbank, UCPB, and Union Bank primarily in the fields of account management and
credit.

Siony C. Dy Tang, (Filipino) 56, Senior Vice President, is currently the Head of Chinese
Banking Division 1 of the CBG. She has been with the Bank since 1973.

Ma. Celia H. Fernandez-Estavillo, (Filipino), 38, is, the Bank’s Director, Corporate
Secretary and Senior Vice President and Head—Legal & Regulatory Affairs Group. She is also a
Director and Corporate Secretary in Luisita Industrial Park, Philippine Integrated Advertising
Agency, Averon Holdings, Inc., RCBC Capital, and Bankard and is a Trustee of Mapua Institute of
Technology and Yuchengco Center. Before joining RCBC, she was the Assistant Vice President for
Global Business Development at ABS-CBN Broadcasting Corp., and Chief of Staff at the Office of
- page 37 -

Senator Edgardo J. Angara. She graduated from the University of the Philippines with a Bachelor
of Science in Business Economics (Summa Cum Laude). She also graduated from the same
university with a Bachelor of Laws degree (Cum Laude). She earned her Master of Laws (LL.M)
in Corporate Law (Cum Laude) from New York University School of Law. She received the highest
score in the Philippine Bar examinations of 1997.

Lourdes Bernadette M. Ferrer, (Filipino) 51, Senior Vice President, is currently the Head of
Trust and Investments. Prior to joining the Bank on 1 September 2000, she held various related
positions in Solidbank Corporation and the International Corporate Bank. She graduated from the
University of the Philippines with a Bachelor of Science degree in Statistics and likewise obtained
her Master’s Degree in Business Administration from the same university.

Prudencio J. Gesta, (Filipino), 57, is the Regional Sales Manager for Visayas Region
composed of 39 branches and 1 ext office. He has been with the bank for 35 years and has held
various positions in operations and sales prior to his appointment as RSM in 2008. He finished his
Branch Officer's Training Program in 1978 at HO and has attended various seminars and trainings
in Sales, Core Credits and Operations. He graduated from St. Paul University in Surigao City with
a Bachelor of Science in Commerce major in Accounting (with special academic award as Cum
Laude). He is quite active in various local NGOs and professional organizations and recently a
member of the Board of Trustees of Cebu Chamber of Commerce and as its VP Finance and
Administration serving his 2nd term. He was Past President of Cebu Bankers Club in 2002 and
Tacloban Bankers Club in 1986, Past President of Financial Executives of Cebu in 2003 and Past
Area Governor for Leyte Samar Area of Lions Club Intl. in 1991.

Jose P. Ledesma III, (Filipino), 58, is the Division Head for South Metro Manila Region. He is
also the Treasurer/ Director of Nile Agro Industrial Corporation, President of Bacolod Boys Home
Foundation, Treasurer of Welcome Home Foundation, Inc., Finance Council Member of the
Diocese of Bacolod. Also a Member of the Negros Edconomic Development Foundation and an
Independent Director of the Dungganon Bank (an NGO Thrift Bank owned by Negros Women for
Tomorrow). He is likewise a Member of the Metro Bacolod Chamber of Commerce & Industry, a
Board of Trustees of St. Joseph's High School- La Salle, Vice-President/Board of Trustees of USLS
Graduate School Foundation and a Board of Trustees of the De La Salle Philippines. He graduated
from the University of St. La Salle in Bacolod City with the degree of AB Commerce Major in
Economics and Management. He earned his Masters in Business Administration and his Doctoral
(PhD. Major in Business Administration) at the same university on 1995 and 2005 respectively.
He was awarded with an Academic Excellence Award in his Doctoral for receiving the highest
GPA.

Eli D. Lao, (Filipino) 53, Senior Vice President, is the Head of Chinese Banking Segment under
the CBG since 2000. He has been with the Bank since 1978, holding various positions.

Regino V. Magno, (Filipino) 52, Senior Vice President, is the Bank’s Chief Risk Officer and
Head of Corporate Risk Management Services (CRISMS). Prior to joining RCBC, he was the Chief
Risk Officer of Sterling Bank of Asia from August 2007 to December 2008.He was a Market Risk
Consultant of Chase Cooper, a London-based consulting firm; Chief Risk Officer of Philippine
National Bank for four years; a Consultant of Philippine Deposit Insurance Corporation for a year;
and a Senior Risk Manager at the Bank of the Philippine Islands for four years. He held various
positions in CityTrust Banking Corporation.
- page 38 -

Remedios M. Maranan, (Filipino),50, graduated from the Polytechnic University of the
Philippines with a degree of B.S. Accountancy. She has been with the Bank for more than 20
years. She currently a Regional Service Head for Metro Manila.

Yasuhiro Matsumoto,(Japanese) 49, Senior Vice President, is the Head of CBG’s Japanese
Business Relationship Office since April 2006. Prior to this, he worked for The Bank of Tokyo-
Mitsubishi UFJ, Ltd. since 1984, when the bank was named The Sanwa Bank, Ltd. He has also
previously served as a Director of RCBC.

Reynaldo P. Orsolino, (Filipino) 50, Senior Vice President and Head of the SME Division.
Prior to joining the Bank, he served as Senior Vice President in Philippine National Bank from
June 2003 to July 2007, and previously held senior positions at the Planters Development Bank,
Asian Banking Corporation, and the Land Bank of the Philippines. He holds a degree in Bachelor
of Arts degree in Economics from the University of the Philippines.

Ma. Lourdes Jocelyn S. Pineda, (Filipino), 54, Senior Vice-President, is currently the Head of
Microfinance of RCBC. She brings with her 14 years of experience in the microfinance business,
involving design and set-up of microfinance loan operation, product development, and training of
Lending Officers in individual lending methodology. She has worked with Accion
International/Accion Technical Advisors India as Principal Microfinance Advisor/ Senior Director
and Chemonics International/Microenterprise Access to Banking Services (US AID project) as
Regional Manager and Coordinator from August 2005 to March 2007.

Most of the Directors and executive officers mentioned above have held their positions for at
least five (5) years.

Executive officers with the rank of Assistant Vice President and above are appointed annually by
the Board of Directors in its Organizational Board Meeting right after the shareholders meeting
which is held annually every last Monday of June. None of the Bank’s executive officers are
related to one another or to any of the Bank’s Directors. There are no binding contracts or
arrangements with regards to the tenure of the Bank’s executive officers. All of the officers
identified above are Filipino citizens, except for Mr. Yasuhiro Matsumoto.

There is no person other than the entire human resources as a whole, and the executive officers
who are expected to make a significant contribution to the Bank.


(G) Market Price and Dividends

   (1) Market Price of Bank’s Common Equity

The common shares of the Bank are listed in the Philippine Stock Exchange. The trading prices of
said shares for the different quarters of the years 2010, 2009 and 2008 are as follows:

                      Q1                   Q2                    Q3                 Q4
                    Latest               Latest                Latest             Latest
                  Practicable          Practicable           Practicable        Practicable
                 Trading Date         Trading Date          Trading Date       Trading Date
2010   High         18.25/03.31.10       21.00/04.12.10
       Low          16.00/02.09.10       18.25/04.05.10
                                      (as of 27 May 2010)
- page 39 -

2009     High         11.50/03.27.09        17.00/05.11.09       18.25/09.24.09       19.25/11.18.09
         Low           8.80/03.12.09        10.00/04.01.09       13.50/07.03.09       16.50/11.03.09

2008     High         23.75/01.02.08        19.25/05.26.08       18.00/09.08.08       16.00/10.02.08
         Low          16.50/03.18.08        14.75/06.30.08       13.75/07.01.08        9.30/10.29.08

   (2) Number of Stockholders as of April 30, 20010– 915 stockholders (common)
                                                   – 91 stockholders (preferred)

   (3) Recent sales of unregistered or exempt securities including recent issuance of securities
       constituting an exempt transaction

         The Bank has not sold nor issued any unregistered or exempt securities including any
         recent issuance of securities constituting an exempt transaction in 2003.

  (4) Top 20 Stockholders of RCBC as of April 30, 2010

                             Name                              Number of          Percentage of
                                                                 Shares            Ownership
       Pan Malayan Management                                  473,963,630           50.42%
       PCD Nominee Corporation                                 306,616,631           32.61%
       PCD Nominee Corp.(Non-Filipino)                         72,618,670             7.72%
       Great Pacific Life Assurance Corporation                17,150,132             1.82%
       Malayan Insurance Co., Inc.                             15,565,439             1.66%
       Floirendo, Antonio O.                                   15,149,692             1.61%
       Bankers Assurance Corporation                            8,833,173             0.94%
       F. Yap Securities, Inc.                                  5,050,000             0.54%
       First Nationwide Assurance Corp.                         3,714,413             0.40%
       A. T. Yuchengco, Inc.                                    3,243,871             0.35%
       DHS Investments, Incorporated                            2,233,679             0.24%
       Hydee Management & Resource Corp.                        1,650,719             0.18%
       Reyna, Leonardo T. Siguion                               1,515,938             0.16%
       Spinnaker Global Emerging Markets Fund Ltd.              1,274,802             0.14%
       Spinnaker Global Strategic Fund Ltd.                      867,951              0.09%
       Bacolod Twinstar Corporation                              800,000              0.09%
       Chu, Raymond M.                                           701,000              0.07%
       Wilson, Isabel Caro                                       590,709              0.06%
       Rosario, Rodolfo P. Del                                   574,724              0.06%
       Spinnaker Global Opportunity Fund, Ltd.                   569,592              0.06%

  (5) Cash Dividends

        Year    Amount                      Declaration Date    Record Date             Payment Date
        2008    P0.48 per share or total    March 31, 2008      June 25, 2008           June 30, 2008
                of P462.162 Million
        2009    P0.306 per share or         March 30, 2009      July 06, 2009           July 13, 2009
                P294.629 Million
        2010    P0.60 per share or a        March 30, 2010      May 07, 2010            May 12, 2010
                total of P565.646 Million
- page 40 -


Dividends are declared and paid out of the surplus profits of the Bank as often and at such times
as the Board of Directors may determine after making provisions for the necessary reserves in
accordance with law and the regulations of the Bangko Sentral ng Pilipinas.


(H) Compliance with leading practices on Corporate Governance

RCBC is committed to the ideals of good corporate governance. In compliance with the SEC Code
of Corporate Governance, the Bank has adopted an Evaluation System to measure the
performance of the Chief Executive Officer (CEO), Board of Directors and senior management on
an annual basis. This Evaluation System was based on the basic principles of transparency,
accountability and fairness/equity.

The Bank has adopted fit and proper standards on key personnel taking into consideration their
integrity, technical expertise, education, diligence, and experience or training. Corporate
governance rules/principles were established to ensure that the interest of stakeholders are
always taken into account; that directors, officers and employees are conducting business in a
safe and sound manner; and that transactions entered into between the Bank and related
interests are conducted at arm’s length basis and in the regular course of business.

The Bank has sufficient number of independent directors that gives the assurance of independent
views and perspective. Likewise, independent functions of internal audit, the compliance office,
and the risk management unit lend comfort to stakeholders, including the regulators, of Bank’s
commitment to the principles and practices of good corporate governance.

Based on the latest annual performance evaluation made in Jan 2010 relative to year 2009 using
a self-assessment checklist, the Bank is generally in compliance with the leading practices and
principles on good corporate governance for the year 2009. A certification to that effect was
submitted to the Securities and Exchange Commission (SEC), the Philippine Stock Exchange
(PSE) 69 and the Philippine Dealing and Exchange Corporation (PDEx) on Jan 25, 2010. No major
findings were noted.


(I) Undertaking to Provide Annual Report

    The Bank undertakes to provide each stockholder without charge a copy of the
    annual report on SEC Form 17-A upon the written request to the Bank addressed
    to:


                                Atty. Ma. Celia H. Fernandez-Estavillo
                                Corporate Secretary
                                Rizal Commercial Banking Corporation
                                46/F, Yuchengco Tower, RCBC Plaza
                                6819 Ayala Ave. cor. Sen. Gil J. Puyat Ave.
                                Makati City
- page 42 -




                    RIZAL COMMERCIAL BANKING CORPORATION


                                      AGENDA
                         ANNUAL MEETING OF THE STOCKHOLDERS

       DATE             :       28 June 2010

       TIME             :       4:00 P. M.

       PLACE            :       Alfonso Sycip Executive Lounge
                                47th Floor, Yuchengco Tower
                                RCBC Plaza, 6819 Ayala Ave.
                                cor. Sen. Gil J. Puyat Avenue, Makati City

   1. Proof of the Due Notice of the Meeting

   2. Determination of the presence of a Quorum

   3. Approval of the Minutes of the Annual Meeting of the Stockholders held on June 29, 2009

   4. Approval of the Annual Report and the Audited Financial Statement for 2009

   5. Ratification of the actions and proceedings of the Board of Directors, different Committees
      and Management during the year 2009

   6. Election of Directors

   7. Amendment of Article SEVENTH of the Amended Articles of Incorporation on the
      following:

              a. Increase in common stock from 1.1 Billion to 1.4 Billion shares; and
              b. Removal of pre-emptive rights of stockholders to subscribe for or
                 purchase any share of any class.

   8. Appointment of External Auditor

   9. Other Matters

   10. Adjournment

				
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