EastWest profit up 70%

MANILA, Philippines -  Earnings of listed East West Banking Corp. jumped 70 percent to hit a new record high as the universal bank continued to be consumer-oriented through an aggressive branch expansion program that started in 2012.

EastWest president and CEO Antonio Moncupa Jr. reported the bank’s net income reached an all-time high of P3.4 billion last year, P1.4 billion higher than the P2 billion recorded in 2015.

“As previously mentioned, 2016 will show the early results of our expansion program that started in 2012. This puts behind us the worst of the initial pain of the program that brought us to have the 7th largest store network but kept our income flat at P2 billion in the previous three years,” Moncupa said.

Moncupa said EastWest is the most consumer-focused universal bank in the country with more than half of its loan portfolio lent to consumers.

It targeted 50 percent earnings growth for 2016 as it expected to see the early result of its aggressive expansion program that saw EastWest’s nationwide store network almost triple in five years to 445, including its rural bank subsidiary.

The bank’s total assets surged 25 percent to P292 billion as its consumer loan book jumped 51 percent.

The universal bank’s total loans grew 29 percent to P202 billion while total deposits went up 30 percent to P240 billion, underpinned by a 38 percent increase in low-cost deposits.

EastWest said its core recurring income was up by 25 percent as it sustained its industry-leading net interest margin of 7.7 percent.

Net interest margin, net of provisions for loan losses, was recorded at 4.9 percent, still the highest among universal and commercial banks.

The bank’s net revenues grew 34 percent to P22 billion, while operating expenses rose 21 percent to P12 billion.

“Our productivity is improving as the overhead cost related to the expansion of the last three years gain traction. And that is just the start. We expect further improvement in operating leverage and subsequently, better returns to our investors in the coming years,” Moncupa said.

He told The STAR further improvement would be sustained this year amid the strong growth in consumer and middle market loan.

“We also expect to continue the robust growth in deposits and gains in wealth management,” Moncupa said in a text message.