China Bank earnings rise to record P10.1 billion

MANILA, Philippines — Earnings of China Banking Corp. grew by 24 percent to an all-time high of P10.1 billion in 2019 from P8.1 billion in 2018, driven by the sustained robust growth of its core businesses. 

China Bank president William Whang said 2019 was an outstanding year as the bank exceeded its projected profit. 

“Our financial performance exceeded our projections and puts China Bank, 100 years-strong this year, in a better position to meet the opportunities and challenges ahead,” Whang said. 

The record earnings translated to an improved return on equity of 11.04 percent from 9.5 percent and a return on assets of 1.1 percent from one percent. 

The bank’s net interest income climbed by 14 percent to P26.1 billion while fee-based earnings jumped 49 percent to P8.4 billion. 

Its operating expenses booked a double-digit increase of 13 percent to P20.3 billion from P18 billion amid the ongoing upgrading of systems, processes, infrastructure, and manpower. 

With the significant increase in operating income, China Bank’s cost-to-income ratio improved to 59 percent from 63 percent even as it continued to invest heavily in the needed improvements to provide the best service to customers. 

The listed bank owned by the family of the late retail and banking magnate Henry Sy said its assets rose by 11 percent to P962 billion from P866.1 billion, closer to its P1-trillion asset goal by 2020. 

Its loan book grew by 13 percent to P578 billion, but asset quality remained healthy amid the loans growth, with a gross nonperforming loan (NPL) ratio of 1.5 percent and NPL cover at 129 percent. 

On the other hand, its deposit base inched up by seven percent to P775 billion from P722.1 billion. 

The bank’s capital went up by nine percent to P96 billion from P87.8 billion, translating to an improved capital adequacy ratio of 12.8 percent from 12.2 percent and common equity tier (CET) 1 ratio of 13.7 percent from 13.1 percent. 

China Bank engaged Microsoft last year for digital advisory service as part of its digital transformation strategy and roadmap for delivering enhanced customer experience and for future-proofing its operations. 

It hopes to rollout key digital and automation projects in the next two years to support its goals of business growth, customer centricity, operational excellence, and employee engagement. 

“Leveraging technology and ensuring that all enhancements increasingly translate into seamless and innovative banking services will shape the next 100 years of our progress,” Whang said.