China Bank earnings climb to record P8.1 billion

MANILA, Philippines — China Banking Corp. booked seven percent higher earnings to P8.1 billion last year from P7.4 billion in 2017 amid the sustained strong growth of its core businesses.

China Bank president William Whang said the feat was achieved despite the bank’s expansion program.

“We are gratified that we were able to sustain improvements in our profitability even as our expansion and strategic initiatives remain on track,” Whang said.

The higher profit translated to a return on equity of 9.5 percent, slightly lower than the 9.9 percent booked in 2017, and a return on assets of one percent versus 1.11 percent.

The country’s seventh largest bank in terms of assets booked a double-digit 11 percent increase in total operating income to P28.6 billion.

The bank’s net interest income rose by 17 percent to P22.9 billion from P20 billion, driven by the 13 percent rise in its loan book to P513 billion from P454 billion as consumer loans rose 20 percent while corporate lending grew 18 percent.

The growth in corporate loans was boosted by the robust investment banking activities of China Bank Capital.

Asset quality remained healthy as non-performing loan (NPL) ratio improved to 1.2 percent, better than industry at both the parent bank and subsidiary levels.

NPL reserve cover increased to 155 percent, with the ratio at the parent bank level even stronger at 306 percent from 175 percent in 2017.

China Bank said fee-based revenues excluding trading gains and one-off gains grew 16 percent.

“The growth in revenues from service fees, charges, commissions, and the sale of acquired assets was tempered by the expected decline in trading and foreign exchange gains,” the bank added.

On the funding side, the bank’s deposit base expanded by 14 percent to P722.1 billion.

Continued expansion and investments was reflected in operating expenses of P18 billion, which grew 13 percent excluding provision for impairment and credit losses.

Its asset base grew by 15 percent to P866.1 billion from P752 billion, supported by double-digit growth in loans and investment securities.

Total capital increased five percent to P87.8 billion, while capital adequacy ratios remained healthy with common equity tier 1 ratio at 12.2 percent and total capital adequacy ratio at 13.1 percent.