Bank officials said that higher interest earnings on loans, stronger trading gains, improved fee-based income, prudent spending and lower loan loss provisions accounted for the better-than-expected performance in the first semester.
Chinatrust president Joey A. Bermudez disclosed that loan portfolio rose by 19 percent which also contributed significantly to the bank’s healthy first semester interest earnings.
Bermudez explained that the portfolio expansion grew across all business segments of the bank, which includes Taiwanese businesses, middle market and the consumer businesses. In turn, portfolio growth was initiated already last year thus resulting in early revenue gains for the first semester of the year.
Net income target for 2003 was set at slightly higher than last year, which reached P411 million.
Another factor assisting the improved performance was earnings from recoveries from non-performing loans (NPLs). The NPL ratio also remained low at five percent, or well distant from the industry average of 15 percent.
"Loan loss cover remained comfortably ahead of prudential requirements, regulatory standards and industry benchmarks," the bank president said. Operating expenses were tightly watched and were 17 lower than last year’s, in spite of higher business volume.
Gains from bond trading activities likewise contributed heftily to profits, despite the momentary weakening of bond prices early this year.
Return on equity (ROE) and return on assets (ROA) for the first half were 20 percent and 3.8 percent, respectively. Capital adequacy ratio (CAR) was 29 percent as of end-June, well above the minimum 10 percent set by the Bangko Sentral ng Pilipinas (BSP).
Chinatrust is a wholly owned subsidiary of Chinatrust Commercial Bank, one of the world‚s two hundred fifty biggest banks.
Last year, the Taiwan parent bank posted profits of $346 million and year-end assets of $24.4 billion. It acquired recently Grand Commercial Bank of Taiwan, doubling its distribution channels and solidifying its position as the largest private bank in Taiwan. – Ted P. Torres