China Bank posts record P15 billion earnings in 2021

MANILA, Philippines — China Banking Corp. earned a record P15.1 billion last year, 25 percent more than in 2020, on the back of sustained core business growth and effective cost management.

The strong financial performance of the lender controlled by the family of the late retail and banking magnate Henry Sy translated to a higher return on equity at 13.8 percent, from 12.1 percent, and higher return on assets at 1.5 percent, from 1.2 percent.

China Bank president William Whang said the 2021 results reflect the bank’s disciplined execution of strategies and commitment to supporting customers and employees.

“As we increasingly automate and digitize to navigate the continuing challenges of this pandemic, we are focusing on actions and investments that will redound to superior banking experiences and improved financial outcomes,” Whang said in a statement.

The bank reported an 11 percent increase in revenue to P48.7 billion as net interest income went up by 13 percent to P38.3 billion due to a better net interest margin of 4.2 percent, from 3.9 percent.

Likewise, fee-based earnings inched up by three percent to P10.4 billion, underpinned by a 39 percent jump in core fee-based income such as foreign exchange gain, trust revenues, investment banking commissions, sale of acquired assets, bancassurance fees, and other transaction-based service charges.

China Bank said the rise in operating expenses was controlled at four percent to P22.3 billion as provision for bad debts remained steady at P8.9 billion.

According to the bank, the sustained efforts to manage expenses while investing in growth strategies resulted in a better cost-to-income ratio of 46 percent, from 49 percent.

China Bank chief finance officer Patrick Cheng said  the bank’s loan book went up by nine percent to P609 billion.

Despite the increase in its loan portfolio, the bank’s non-performing loan (NPL) ratio increased slightly to 2.5 percent from 2.3 percent, while NPL cover slipped to 116 percent from 128 percent.

“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 nonperforming loans ratio of 2.5 percent and adequate NPL coverage of 116 percent,” Cheng said.

Likewise, China Bank’s deposit base grew by three percent to P863 billion, driven by the 18 percent rise in checking and savings accounts (CASA) deposits.

“We sustained a robust CASA growth, further improving our CASA ratio to 64 percent from 56 percent,” Cheng said.