Chinabank profit jumps 13% to P18.4 billion

MANILA, Philippines — China Banking Corp. boosted it earnings by 13.5 percent to a record P18.4 billion from January to September mainly due to sustained growth from its core businesses.

The bank’s net income in the first nine months translated to a return on equity of 15.7 percent and a return on assets of 1.6 percent, which were among the highest in the industry.

“This record performance is the result of the hard work of our employees, the continued execution of our strategies, and our steadfast focus on the needs of our customers,” Chinabank president and CEO Romeo Uyan Jr. said in a statement.

From January to September, the bank’s operating income increased by 14 percent to P46.3 billion amid higher interest income from loans, securities and other investments as well as growth in transaction-based income.

The lender’s net interest margin improved to 4.4 percent as of September.

During the nine-month period, Chinabank’s loan portfolio grew by 14 percent to P871.6 billion as both business and consumer lending segments expanded.

The bank said it was able to respond “positively but prudently” to the heightened business appetite of firms and the robust credit demand from consumers.

Asset quality also improved as the lender’s non-performing loan (NPL) ratio eased to 1.8 percent during the period.

Due to the Chinabank’s conservative provisioning stance, credit provisions were hiked by 15 percent to P1.5 billion. This resulted in an NPL cover of 141 percent, higher than the industry average.

Growth in operating expenses was controlled at nine percent to P22 billion due to the bank’s careful spending despite bigger volume-related taxes. Cost-to-income ratio stood at 48 percent.

We sustained our strong asset expansion and continued to be very purposeful in using the bank’s resources to pursue our growth plans and to boost our capabilities to better serve our customers. The improving macro trends and supportive regulatory environment will help the bank’s performance,” Chinabank chief finance officer Patrick Cheng said.

Total assets rose by 13 percent to P1.6 trillion as of end-September. The bank’s deposit base booked a 13-percent increase to P1.3 trillion.

Its total capital went up by 15 percent to P162.7 billion, with common equity tier 1 ratio at 14.8 percent and total capital adequacy ratio at 15.7 percent, both well above the minimum regulatory requirement.

Chinabank provides a full range of banking products and services to corporate, commercial, and retail customers through 648 branches and 1,082 ATMs to date, including the 168 branches and 213 ATMs of its savings bank arm China Bank Savings.