China Bank net income jumps 46%

MANILA, Philippines - China Banking Corp. registered a 46 percent increase in net income in the first semester  to P2.96 billion from P2.03 billion in the same period last year.

The bank attributed strong performance this year to the nearly 11 percent expansion of its loan portfolio and the 22-percent growth in its total deposits.

Net interest income rose 12 percent to P4.43 billion as total gross loans expanded 10.74 percent to P189.87 billion, due to an increase in commercial and consumer loans.

Total deposits grew 22 percent to P290.25 billion on the back of sustained growth in low-cost deposits which, in turn, rose by 35 percent year-on-year to P112.11 billion.

Non-interest income rose 44 percent to P3.47 billion from trading gains, commissions, sale of acquired assets, and fees from new revenue streams like bancassurance ( the sale of life insurance through the bank’s branch network).

Gross revenues improved 18 percent to P10.23 billion, driven by higher fee-based revenues.

Total operating expenses likewise increased 15 percent to P4.48 billion, translating to a cost efficiency ratio of 56.8 percent.

China Bank bought Unity Bank last year to be merged with its thrift bank subsidiary China Bank Savings (CBS) this year, and opened a total of 12 branches to date, two for the main bank and 10 for the savings bank, including the mini branches in Savemore Market.

Total resources grew 20 percent to P345.62 billion.

Non-performing loans (NPL) dropped six percent as intensive monitoring of loans at the management and board level continued, further improving gross NPL ratio to 2.64 percent from 3.12 percent.

With highly collateralized loans and adequate coverage for probable losses already in the books, the provision for losses of P109.93 million maintained China Bank’s loan loss coverage ratio at 137 percent.

Its Tier 1 capital adequacy ratio (CAR) and total CAR remain well above the regulatory minimum – at 17.11 percent and 17.96 percent, respectively.

China Bank manages 300 branches nationwide including CBS, which it plans to expand to 415 by 2014. The bank is on track with its expansion plans, with 17 China Bank branches and 36 CBS branches in the pipeline this year.