MANILA, Philippines — China Banking Corp. is ready to set aside more funds for bad loans in anticipation of higher defaults due to the impact of the coronavirus disease 2019 or COVID-19 pandemic.
China Bank president William Whang told the bank’s stockholders during an online meeting last Thursday it has taken steps by increasing loan loss provisions for possible higher credit losses as businesses slowed down considerably since the entire Luzon was placed under an enhanced community quarantine last March 16.
“We will continue to do this as we see fit. Even after this exercise, your bank will remain with a strong and healthy balance sheet,” Whang said.
The bank owned by the family of the late retail and banking magnate Henry Sy raised its provisioning by 51 percent to P412 million in the first quarter from P273 million in the same quarter last year in anticipation of possible higher credit losses in the face of the ongoing COVID-19 crisis.
Despite the higher provisioning, China Bank’s net income increased by 19 percent to P2.2 billion in the first quarter from P1.9 billion in the same quarter last year.
Throughout the various states of community quarantine, China Bank focused on business continuity while ensuring the safety and well-being of employees and customers.
Despite the scaled down operations during the Luzon-wide lockdown, its loan book increased by 15 percent to P584 billion, while its deposits base rose nine percent to P785 billion.
In April, the bank breached the P1-trillion mark in assets.
Meanwhile, China Bank declared P2.68 billion cash dividends, 14 percent higher than the previous year. Since its stock rights offer in 2014, its total cash dividend payments would be in excess of P14 billion, including this year’s cash dividends.
“We are pleased that China Bank’s sustained financial strength allowed us to once again return earnings to our shareholders,” Whang said.