China Bank profit flat at P3.6 B in H1

MANILA, Philippines — Earnings of Sy-led China Banking Corp. was flat at P3.6 billion in the first half despite the sharp drop in fee-based revenues as the listed bank reduced its reliance on securities trading.

China Bank said in a disclosure to the Philippine Stock Exchange (PSE) its core income rose 15 percent to P13.3 billion from January to June, driven by the sustained growth in core businesses.

The bank’s operating income climbed by seven percent to P13.1 billion in the first semester.

China Bank’s net interest revenues grew 20 percent to P11.1 billion on the back of robust growth in loans and securities. Improving loan yields offset the rise in funding cost, leading to an improvement in net interest margin to 3.16 percent from 3.07 percent.

However, fee-based revenues plunged by 32 percent to P2.1 billion as the bank reduced its reliance on securities trading.

Strong demand across all customer segments translated to an 18 percent increase in the listed bank’s loan book. Consumer lending led the pack growing 21 percent in the first half of the year.

Its deposit base expanded by 18 percent to P653.4 billion, underpinned by a 32 percent increase in low cost funds to P374.6 billion. The resulting loans to deposit ratio was a healthy 72 percent.

China Bank is the country’s seventh largest bank in terms of assets as total resources grew 17 percent to P768.4 billion in end-June.

Total capital funds inched up four percent to P83.6 billion, while its common equity tier 1 (CET 1) and total capital adequacy ratios stood at 12.6 percent and 13.3 percent, respectively, well above the minimum regulatory requirement.

The bank is raising as much as P50 billion through a peso-funding program covering a combination of long term negotiable certificates of deposits (LTNCDs), retail bonds, and commercial papers.