China Bank earnings  jump 37% to P4.9 billion

MANILA, Philippines — China Banking Corp. booked a 37 percent jump in net income to P4.9 billion in the first quarter of the year from P3.6 billion last year as the Philippine economy continues to recover from the COVID-19 pandemic.

China Bank president William Whang attributed  the improved profitability to the bank’s sustained core business growth.

“China Bank’s organic growth momentum continues-loans and deposits are up, expenses are down, and credit quality remains solid,” Whang said.

The bank reported a 15 percent increase in net interest income to P10.8 billion  on the back of higher earning assets and lower interest expense.

Its net interest margin further improved to 4.3 percent.

China Bank’s total revenue slipped by two percent to P12.5 billion as lower trading gains compressed fee-based income to P1.7 billion, or 50 percent lower than last year’s P3.4 billion.

Lower trading gains erased the 18 percent increase in service charges, fees and commissions as well as the 22 percent jump in trust fees.

The bank owned by the family of the late retail and banking magnate Henry Sy booked a 65 percent drop in provisions for credit losses to P780 million, reflecting an improved macro-economic outlook.

Despite the decline, China Bank’s resulting non-performing loan (NPL) coverage was higher at 119 percent, while its NPL ratio improved to 2.5 percent form 3.8 percent.

The bank also reported an eight percent decline in operating expenses to P5.7 billion amid prudent cost management. This translated to an improved cost efficiency ratio of 46 percent.

China Bank chief finance officer Patrick Cheng said  the bank’s total assets expanded by 12 percent to P1.13 trillion.

“Our effective asset-liability management and solid capital structure have allowed clients to access our balance sheet and enabled us to achieve better-than-industry growths in assets, loans, and equity,” Cheng said.

The bank’s loan book grew by 10 percent to P632 billion, while its deposit base increased by eight percent to P879 billion.

Its total equity rose 15 percent to P125 billion, with a common equity Tier 1 ratio of 15.5 percent and total capital adequacy ratio of 16.3 percent.

China Bank has 636 branches and 1,037 ATMs to date, including the 160 branches and 165 ATMs of China Bank Savings.