MANILA, Philippines — China Banking Corp. saw its earnings increase by six percent to a record P11.4 billion in the first half from P10.8 billion in the same period last year thanks to stronger core lending and deposit-taking activities.
This translated to a return on equity of 15.1 percent and a return on assets of 1.5 percent as of end-June, still among the highest in the industry.
“Our business performance continued to improve during the first half of the year,” Chinabank president and CEO Romeo Uyan Jr. said in a statement.
“The continued growth of our core lending and deposit taking businesses, combined with stable asset credit quality and controlled operating costs, allowed us to register our highest first half net income to date, solidifying our position as one of the top four banks in the country,” he said.
According to Chinabank, its net interest income rose by 19 percent to P30.4 billion in the first half as higher interest income offset the rise in interest expense. This led to a 25-basis-point improvement in net interest margin to 4.4 percent.
Non-performing loan (NPL) ratio stood at 1.9 percent in the first half amid the bank’s significant loan expansion. Chinabank also trimmed its credit provisions at P737 million, but NPL coverage remained high at 141 percent.
The bank’s gross loans jumped by 10 percent to P817 billion due to strong demand across market segments. Consumer loans accounted for a quarter of the lender’s total loan portfolio. Deposits grew by 14 percent to P1.3 trillion.
Meanwhile, operating expenses went up by five percent to P14.1 billion, mainly on higher volume-related taxes. Cost-to-income ratio slightly improved to 49 percent as of end-June.
Chinabank’s total assets climbed by 12 percent to P1.5 trillion in the first half, making it the fourth largest private universal bank in the country in terms of assets.
The balance sheet expansion was supported by a 10-percent hike in capital to P152 billion. The bank’s capital adequacy ratio stood at 15.3 percent and common equity Tier 1 was at 14.5 percent, both above the minimum requirement of the central bank.
“This solid financial performance, backed by strong capital and liquidity, reflects CBC’s inherent financial strength, prudent risk management, and sharpened customer focus,” Chinabank chief finance officer Patrick Cheng said.
Chinabank is celebrating its 104th anniversary on Aug. 16. It provides a full range of banking products and services to corporate, commercial and retail customers through 648 branches and 1,078 ATMs to date. This includes the 168 branches and 210 ATMs of its savings bank arm.