The bigger-than-expected growth was attributed to gains from trading and investment earnings, particularly from its housing loan program.
Total loans grew 15 percent to P9 billion in the first six months this year, from P8 billion in the same period last year. The bank managed to trim its non-performing loans (NPL) ratio to only 7.9 percent, from 8.32 percent at the start of the year. The commercial banking industry’s average NPL ratio is nearly 18 percent.
Earnings from trading and securities rose from P98.7 million to P415.9 million for a growth ratio of over 300 percent. Chinatrust earned over P23.4 million in foreign exchange trading coming from a net loss of P11.6 million the previous year.
The bank set aside P156.9 million for loan losses as a precaution for the relatively poor economic developments of the country which could affect bank loan repayments.
Chinatrust president Joey Bermudez said their aggressive housing loan program greatly aided their performance.
"Our home loan product is doing very well and we are introducing more exciting products in the next months. These give us a reason to be optimistic for the rest of the year," Bermudez said.
At the start of the second quarter, the bank introduced a housing loan program that offers zero interest on the last five years of the 15-year loan program. It was immediately embraced by the public as evidenced by new loans amounting to P600 million by the end of the second quarter.
In the first six months, the bank outperformed Deutsche Bank and Citibank in terms of ROE. Only the Hongkong and Shanghai Bank Co. (32.63 percent) and JP Morgan Chase Bank (30.97 percent) did better.
Recently, Chinatrust acquired the personal loan portfolio of ABN Amro. The sale will allow ABN Amro to focus on its core business of investment banking while it benefits Chinatrust in terms of increased emphasis on consumer banking.