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Business

EastWest Bank boosts 9-month profit by 43%

Mary Grace Padin - The Philippine Star
EastWest Bank boosts  9-month profit by 43%

MANILA, Philippines — Earnings of  East West Banking Corp. saw a double digit growth in the first nine months on the back of higher core revenues, improved margins, higher trading gains and lower credit costs.

In a disclosure to the Philippine Stock Exchange (PSE), the Gotianun-led bank said its net income for the January to September period rose by 43 percent to P4.6 billion from P3.2 billion in the same period last year.

EastWest president and deputy chief executive officer Jesus Roberto Reyes said the improvement came after the bank faced a margin squeeze in the first half due to tight liquidity. However, he said this has started to normalize in the third quarter.

“In the first half, we faced a margin squeeze. Our asset yields went up by 73 basis points, while our interest expenses doubled from the tight liquidity,” Reyes said.

“Market liquidity had started to normalize in the third quarter and funding cost went lower. We are proud to see our consumer-led business model works,” he said.

EastWest reported a net interest margin of 6.6 percent in the third quarter of the year, a slight improvement from the 6.5 percent and 6.4 percent recorded in the two previous quarters.

Total loans grew by 13 percent to reach P261.5 billion, driven by consumer loans, which comprise 73 percent of the total.

Meanwhile, the bank said its return on equity (ROE) stood at 14 percent, while its total assets grew by 15 percent to P387.3 billion as of end-September.

According to the bank’s statement, revenues during the nine-month period rose by 11 percent to P21 billion from P18.9 billion in the same period last year.

Net interest income grew by P714 million to P15.2 billion, while fees and commissions went up by 15 percent to P3.9 billion.

Likewise, securities and foreign exchange trading gains was P952.8 million higher than last year, amounting to P1.4 billion in the first nine months.

EastWest also reported total deposits amounting to P291.6 billion from January to September, 10 percent higher than the level from a year ago.

Meanwhile, the bank said its operating expenses, excluding provisions for losses during the nine-month period increased by 11 percent to P12.3 billion, due to business-related expenses and intensified marketing campaigns to generate more loans and retail deposits.

Despite this, EastWest said its cost-to-income ratio remained stable at 59 percent.

Provisions for losses went down by 15 percent to P2.7 billion, which the bank attributed to its more seasoned consumer portfolio.

“While EastWest has yet to realize its full potential from its past investments, we are on track to have our most profitable year. We are grateful for the continued support of our customers and the hard work of EWBankers. With their backing, we are confident that EastWest will continue to grow and maintain its position among the most profitable banks in the industry,” EastWest Bank chief executive officer Antonio Moncupa said.

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