EastWest Q1 profit down 22% to P945 million

MANILA, Philippines — Losses from securities trading due to the volatile markets and lower contribution from its rural bank arm pulled down the earnings of Gotianun-led East West Banking Corp. by 22 percent in the first quarter.

 The net income of EastWest Bank amounted to P945.4 million from January to March, P264 million lower than the P1.2 billion recorded in the same period last year.

The listed bank said trading losses amounted to P136.5 million in the first quarter, reversing the P166.5 million gains booked in the same quarter last year.

“Although trading losses occurred early this 2018, we remain hopeful we will continue our track record of not losing for a whole year,” EastWest president and deputy CEO Jesus Roberto Reyes said.

Likewise, Reyes said lower contribution from wholly-owned EastWest Rural Bank (EWRB) after the Department of Education (DepEd) effectively suspended new loans to teachers pending the renewal of the terms of the agency’s Automatic Payroll Deduction System (APDS) last November.

He said the suspension heavily impacted EWRB given loans to public school teachers comprise its main business.

“On EWRB, we will continue to work to see how to proceed on the loans to public school teachers. We remain optimistic this can resume as our loans to public school teachers have the most favorable terms for the borrowers among similar lending program for the public sector,” Reyes said.

The bank said its net interest income climbed by eight percent to P4.2 billion, as consumer loans booked a double-digit 11 percent increase despite the decrease in public school teachers’ loans.

On the other hand, total operating income slipped by 4.8 percent due mainly to the said APDS setback experienced by EWRB and trading losses.

The bank’s operating expenses inched up by five percent to P3.35 billion, mainly due to increase in taxes, particularly the higher taxes on documentary stamp taxes (DST) on time deposits that took effect at the start of the year.

EastWest said assets rose by eight percent to P316.9 billion as consumer loans grew by 12 percent, while business loans slipped five percent. The bank’s deposit base rose by nine percent to P137.4 billion.