EastWest profit soars 65% to P4.5 billion in 6 months
Lawrence Agcaoili (The Philippine Star) - August 6, 2020 - 12:00am

MANILA, Philippines — Gotianun-led EastWest Banking Corp. recorded a 65 percent jump in earnings in the first half despite building up its war chest for bad loans amid the COVID-19 pandemic.

In a disclosure to the Philippine Stock Exchange (PSE), EastWest Bank said its net income amounted to P4.5 billion from January to June, P1.8 billion higher compared to the P2.7 billion recorded in the same period last year on the back of better margins from its core lending and deposit-taking business and higher trading gains.

EastWest Bank president and chief executive officer Antonio Moncupa Jr. said the higher earnings were recorded amid the challenging times as the listed bank continues to build up its loan loss provision.

“We continue to build our reserves for loan losses so we can move past this pandemic sooner and assure our depositors, concentrate in assisting our borrowers and prepare to participate in the economic recovery efforts after the pandemic,” Moncupa said.

The loan loss provision of the country’s 11th largest lender in terms of assets reached P5.5 billion in the first half of the year or 3.3 times the previous year’s P1.7 billion.

During the bank’s virtual stockholders’ meeting last June, the bank said it was setting aside around P10 billion or about four percent of the bank’s total loan book for soured loans this year.

The bank said the pre-emptive provisions are made to anticipate the economic impact to households and businesses from the virus-induced disruption.

“While we are happy to see the fruits of past investments and the efforts of every EastWest banker to serve our customers better, we are well aware that we live in challenging times,” Moncupa said.

The bank’s revenues jumped by 39 percent to P18.4 billion in the first half from P13.2 billion in the same period last year. Its return on equity improved to 17.4 percent from 13.2 percent.

Its net interest income, accounting for 73 percent of revenues, went up by 38 percent to P13.4 billion as the bank sustained its industry leading margins. Net interest margin improved by 142 basis points to 8.3 percent amid the easing of interest rates by the Bangko Sentral ng Pilipinas (BSP).

On the other hand, non-interest income surged by 42 percent to P1.5 billion, driven mainly by fixed income securities trading gains.

EastWest Bank’s operating expenses, excluding provisions for losses, increased marginally by two percent to P8 billion from P7.9 billion mainly from higher compensation costs.

Its total assets slipped by two percent to P383 billion from P389.5 billion.

The bank’s loan book was steady at P255.6 billion, while its deposit base inched by four percent to P300.4 billion. Its net non-performing loan (NPL) ratio stood at 1.8 percent.

EASTWEST BANK
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