China Bank income rises 21% to P6.7 billion

MANILA,Philippines — China Banking Corp. continued to book a double digit growth in its earnings in the first nine months on the back of sustained improvement of its core businesses.

In a disclosure to the Philippine Stock Exchange, China Bank said its total consolidated income for the January to September period reached P6.7 billion, up 21 percent from P5.6 billion in the same period of last year.

This translated to a 9.92-percent return on equity and 0.99-percent return on assets.

For the third quarter of 2019, alone, China Bank booked net earnings amounting to P2.5 billion, 25 percent higher compared to the same quarter of 2018.

Broken down, China Bank said its net interest income for the nine-month period climbed by nine percent to P18.7 billion, accounting for 78 percent of the bank’s total operating income of P23.8 billion, which is also up by 15 percent. Net interest margin likewise improved to 3.29 percent.

The bank said its loan portfolio grew by 10 percent to P552.5 billion, owing to increased demand across all market segments.

Amid the growth in loans, China Bank said its asset quality remained healthy, with a non-performing loan (NPL) ratio of 1.4 percent and NPL cover at 122 percent.

Total deposits also jumped by 12 percent to P777.2 billion.

Meanwhile, China Bank’s non-interest income during the period jumped by 43 percent to P5.2 billion, driven mainly by service charges, fees and commissions, as well as trading and securities gains.

Operating expenses increased 19 percent to P15.6 billion as the bank continued to upgrade and expand its systems, processes, infrastructure and manpower.

China Bank said it is on track to achieve its goal of becoming a P1-trillion bank on its 100th anniversary next year, as it registered a 17 percent growth in assets, reaching P953.9 billion as of end-September 2019.

Total capital funds stood at P92.9 billion, with a total capital adequacy ratio of 13.6 percent and common equity tier 1 ratio of 12.7 percent.

Last July, China Banking Corp. successfully tapped the onshore debt market, raising P30 billion via its maiden fixed rate bonds issue, six times the original issue size of P5 billion.

The bond issue, which is due January 2021, with an annual interest rate of 5.7 percent, is part of China Bank’s planned P75-billion fund raising program for the next three years to support its expansion and strategic initiatives.