MANILA, Philippines — Listed China Banking Corp. has injected P500 million in additional equity into its thrift bank unit to fortify its capital base and support its aggressive expansion program.
In a disclosure to the Philippine Stock Exchange (PSE), the bank said its board of directors approved the additional capital infusion to China Bank Savings Inc. (CBSI) during its regular meeting last Wednesday.
China Bank controls 98.29 percent of CBSI.
The capital build up is aimed at supporting future business expansion in fast growing markets, small and medium enterprise (SME) sector as well as consumer credit, including teachers‘ loans.
CBSI, formerly known as The Manila Banking Corp., was incorporated in May 1960. CBSI merged with Pampanga-based Unity Bank A Rural Bank Inc. in 2013 and Planters Development Bank in 2014.
The Bangko Sentral ng Pilipinas (BSP) approved the increase in the authorized capital of CBSI to P6 billion from P5 billion in August last year.
CBSI is poised to sustain profitability and contribute significantly to consolidated bottomline in 2018.
The bank is building up marketing capability, credit management, and backroom support in specialized lending to further ramp up the retail business, while maintaining healthy asset quality.
As network expansion beyond the existing 160 branches would be marginal, its branch banking group is establishing sales management as a discipline at all branches to boost business performance, drive deposit growth, and tighten relationship with clients.
Earnings of China Bank inched up two percent to P1.5 billion in the first quarter on the back of the sustained growth of its core businesses.
Net interest income jumped 18 percent to P5.29 billion amid the 20 percent growth in its loan book, while non-interest earnings went up six percent to P1.14 billion on higher income from service charges, fees from investment banking as well as foreign exchange gains.
China Bank’s operating expenses rose 13 percent to P4.24 billion as it carried out its expansion program by investing in new branches, more people, and up-to-date technology.
China Bank has 442 branches while CBSI has 160 with a combined ATM network of 924 nationwide.