Chinabank profit jumps 18 percent to P5.9 billion

MANILA, Philippines — The earnings of China Banking Corp. (China Bank) grew by 18 percent to P5.9 billion in the first quarter from P5 billion in the same period a year ago, driven by sustained expansion of its core business.

This translated to a return on equity of 15.5 percent in the first quarter, while return on assets stood at 1.6 percent, among the best in the industry.

“We are focused on sustaining our growth trajectory. Our good first quarter results provide the momentum to achieve our ambitious goals and targets,” China Bank president and CEO Romeo Uyan Jr. said.

The Sy-led bank reported an 18-percent improvement in net interest income to P15 billion in the first three months, mainly due to higher asset yields and loan volume.

The bank’s net interest margin improved by 22 basis points to 4.4 percent.

Its loan book grew by 11 percent to P805 billion amid strong demand for consumer and business loans.

China Bank’s provision for potential loan losses fell to P302 million as its non-performing loan (NPL) ratio improved slightly to 1.8 percent from 2.3 percent in the same period a year ago. NPL coverage also improved to 143 percent.

Operating expenses rose by six percent to P7.2 billion, translating to a better cost-to-income ratio of 48 percent in the first quarter.

The lender saw its total resources grow by 11 percent to P1.5 trillion as its deposit base expanded by 13 percent to P1.2 trillion.

China Bank’s capitalization increased by 11 percent to P154 billion, with a common equity tier 1 (CET 1) ratio of 15.3 percent and total capital adequacy ratio (CAR) of 16.2 percent, both above the thresholds set by regulators.

“With our strong balance sheet and capital position, we can sufficiently fund our growth plans in the years ahead,” China Bank chief finance officer Patrick Cheng said.

China Bank recently announced an all-time high cash dividends of P5.9 billion, 16 percent higher from last year and represents 27 percent of its 2023 net income of P22 billion.

The bank’s stockholders on record as of May 3 will receive P1.20 per share regular cash dividend and an additional P1 per share special cash dividend on May 16.

Moody’s Investor Service has also maintained its Baa2 deposit and issuer ratings for China Bank with a stable outlook.

China Bank provides a full range of banking products and services to corporate, commercial, and retail customers through 648 branches and 1,047 ATMs, including the 168 branches and 203 ATMs of China Bank Savings.