Sy-led banks' profits grow despite pandemic struggles in 2021

MANILA, Philippines — Sy-led banks China Banking Corp. and BDO Unibank Inc. saw their fortunes rise last year, delivering double-digit net income growth amid a pandemic-driven downturn in the Philippine economy.

In separate disclosures to the Philippine Stock Exchange on Thursday, China Bank reported its net income grew 25% on-year to P15.1 billion in 2021. BDO, meanwhile, netted P42.8 billion, up 51% compared with a year ago in what the bank said was an indication of normalization to pre-pandemic levels.

Fee-based income drove income growth for the Sy-led banks, benefitting from the shift of consumers to online cashless transactions to purchase and sell goods and manage finances as strict quarantine measures restricted mobility.

For China Bank, fee-based income inched up 3% year-on-year to P10.4 billion, supported by a 39% increase in core fee-based income. BDO reported profits rose on the back of an 11% increase in non-interest income, which include deposit and transaction fees, and normalized provisions.

Loans drive growth

Besides that, China Bank's revenues rose 11% year-on-year to P48.7 billion in 2021. It closed in 2021 with assets growing 7% to P1.1 trillion underpinned by a 9% expansion in loans.

“We deployed more loans to businesses to aid their recovery while continuing to support the credit needs of consumers. We kept a close eye on asset quality, maintaining a lower-than-industry non-performing loans ratio of 2.5% and adequate NPL coverage of 116%,” Patrick Cheng, company chief finance officer, said.

Deposits in China Bank accounts inched up at an annualized rate of 3% to P863 billion in 2021 on the back of an 18% growth in new checking and savings account deposits.

Its non-performing loans ratio rose to 2.5% by the end of last year compared with the same period in 2020.

Meanwhile, BDO, the country's largest bank in terms of assets, said their growth in 2021 keenly reflected their "operational resiliency" amid pandemic struggles, reporting loans taken out by businesses and consumers grew by 6% on-year following the relaxation of quarantine mobility restrictions.

BDO's total deposits rose 8% last year on the back of 13% growth in current account/savings account deposits. Its capital adequacy ratio, a measure of its total available capital, stood at 14.6% above the regulatory minimum of 10%.

BDO's NPL ratio stood at 2.8% by the end of 2021, declining from the 3.1% recorded between July and August last year.