China Bank raising P100 billion fresh funds

MANILA, Philippines — China Banking Corp. is planning to raise P100 billion over the next three years to actively participate in the recovery and expansion of the country from the pandemic-induced recession.

The bank’s board of directors approved the fund raising exercise through the issuance of retail bonds or commercial papers during a meeting last Wednesday.

“The proceeds shall be used to support the bank’s strategic initiatives and expansion program. This is also in line with the bank’s intention to be an active participant in the country’s economic recovery and expansion,” China Bank said in a disclosure to the Philippine Stock Exchange (PSE).

Just last month, the bank raised P20 billion through the issuance of three-year bonds.

China Bank approved a P45 billion fund raising exercise in September last year amid the uncertainties brought about by the pandemic.

China Bank president William Whang earlier said the listed bank is positioned well to weather the impact of the global health crisis.

“Going into the crisis, China Bank was operationally and financially sound, but what enabled us to remain resilient and to sustain our growth momentum was our employees who went above and beyond in 2020,” Whang said.

The bank’s net income jumped by 20 percent to P12.1 billion last year from P10.1 billion in 2019 on the back of strong growth in core businesses, while better investment and trading returns helped offset pandemic-induced loan buffer.

China Bank’s provision for potential loan losses reached P8.9 billion last year, 3.5 times the P2.6 billion allocated in 2019, resulting in a non-performing loan (NPL) cover of 128 percent. The bank’s NPL ratio increased to 2.3 percent from 1.5 percent.

Its loan book slipped one percent to P572 billion last year, while its deposit base grew by eight percent to P835 billion.

China Bank’s asset base expanded by eight percent to hit P1.04 trillion last year from P962 billion in 2019.