China Bank profit rises to P5 billion in Q1

MANILA, Philippines — Earnings of China Banking Corp. inched up by three percent to P5 billion in the first quarter of the year from P4.9 billion in the same quarter last year, driven by robust asset base expansion, strong net interest income, and lower credit provisions.

China Bank president and CEO Romeo Uyan Jr. said the bank continues to do well amid the challenging operating environment, reflecting the quality of its balance sheet, prudent management, and the strength of its core businesses.

“We are off to a good start as our strong capital position and solid liquidity allow us to play a major role in the reopening and growth of the Philippine economy,” Uyan said.

The bank’s return on equity declined to 14.7 percent from 16 percent, while its return on assets slipped to 1.5 percent from 1.7 percent, but still among the best in the industry.

The Sy-led bank reported an 18 percent improvement in net interest income to P12.7 billion in the first quarter of the year from P10.8 billion in the comparable quarter last year.

Its interest earnings jumped by 46 percent to P18.4 billion from P12.6 billion, while interest expense almost quadrupled to P5.7 billion from P1.9 billion.

Meanwhile, the bank’s fee-based income fell by 72 percent to P500 million from P1.7 billion mainly due to trading losses.

China Bank’s total revenue climbed by five percent to P13.2 billion from January to March this year versus the P12.5 billion earned in the same period last year.

Its loan book grew by 15 percent to P709 billion from P616 billion as consumer loans jumped by 23 percent while business loans increased by 13 percent.

Its thrift banking arm, China Bank Savings, also sustained robust growth in retail loans, with its personal loans doubling year-on-year to account for almost a third of total consumer business.

As the economy recovers, China Bank’s provision for potential loan losses fell by 44 percent to P440 million as its non-performing loan (NPL) ratio improved slightly to 2.3 percent from 2.4 percent.

Operating expenses, excluding provision for impairment and credit losses, went up by 19 percent to P6.8 billion from P5.7 billion, mainly from higher volume-related taxes.

Core operating expenses growth was also modest, with the bank’s continued investments on digital transformation and human resource development.

The bank saw its total resources grow by 20 percent to P1.35 trillion from P1.13 trillion as its deposit base expanded by 24 percent to P1.09 trillion from P879 billion, reflecting the bank’s solid customer relationships.

“We sustained the strong momentum in loans and deposits, outpacing the industry average and reflecting the successful execution of our strategy to strengthen our core businesses, effectively manage resources, and prudently reduce risks,” China Bank chief finance officer Patrick Cheng said.

China Bank’s capitalization increased by 11 percent to P139 billion, with a common equity tier 1 (CET 1) ratio of 15.4 percent and total capital adequacy ratio (CAR) of 16.3 percent, both above the thresholds set by regulators.

China Bank provides a full range of banking products and services to corporate, commercial, and retail customers through 641 branches and 1,047 ATMs, including the 162 branches and 173 ATMs of China Bank Savings.