China Bank earnings grow 23% to P8.2 billion
China Bank president William Whang said 2020 continues to be very challenging amid the difficult business environment, prompting the bank to allocate more funds for probable credit losses.
Philstar.com/Deejae Dumlao
China Bank earnings grow 23% to P8.2 billion
Lawrence Agcaoili (The Philippine Star) - October 30, 2020 - 12:00am

MANILA, Philippines — China Banking Corp. reported that its earnings grew by 23 percent to P8.2 billion from January to September despite higher provisioning for bad loans due to the COVID-19 pandemic.

China Bank president William Whang said 2020 continues to be very challenging amid the difficult business environment, prompting the bank to allocate more funds for probable credit losses.

“The year 2020 has been very challenging, but with the hard work and commitment of our employees, we are able to pull through and provide the needed banking services and support to our clients. We are still expecting continuing challenges from a difficult environment, and the results give us the buffer to absorb further stresses down the road,” Whang said.

During the nine-month period, China Bank hiked its provisions for probable credit losses to P6.3 billion, 12 times bigger than last year, as it continues to work with borrowers experiencing financial difficulty under the current circumstances.

With the expected impact of the pandemic and lockdown measures on asset quality, the bank’s non-performing performing loans (NPL) ratio rose to 2.5 percent in September from 1.4 percent in the same month last year, while NPL cover for the period remains sufficient at 104 percent from 122 percent.

The earnings from January to September translated to an improved return on equity of 11.15 percent from a year-ago level of 9.92 percent.

Net interest income for the nine-month period jumped by 35 percent to P25 billion mainly from the 36 percent drop in interest expense. This led to a higher net interest margin of 3.89 percent.

On the other hand, fee-based income likewise increased by 35 percent to P7 billion as trading gains surged 3.6 times, while income from its trust business grew by 15 percent.

Operating income without trading gains reached P28 billion, up 24 percent year-on-year, while expenses inched up by six percent to P16 billion, mainly from pandemic- and volume-related costs.

Its loan book grew by 7.7 percent to P595 billion from January to September compared to P552.5 billion in the same period last year, while its deposit base also increased by 6.4 percent to P827 billion from P777.2 billion

For the third quarter alone, China Bank’s net income jumped by 21 percent to P3 billion from P2.5 billion in the same quarter last year.

CHINA BANK
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