China Bank books higher earn­ings in 3rd quar­ter

Business World - - BANKING&FINANCE - K.A.N. Vi­dal

CHINA BANK­ING Corp. (China Bank) saw its net in­come grow in the third quar­ter as its core and fee-based busi­nesses ex­panded.

In a dis­clo­sure on Thurs­day, Syled China Bank said its con­sol­i­dated net in­come in the third quar­ter stood at P2.09 bil­lion, up by 32% from the P1.58 bil­lion recorded in the same pe­riod a year ago.

The growth in its third-quar­ter net in­come drove its earn­ings for the first nine months of the year to rise to P5.68 bil­lion, 17% higher than P4.48 bil­lion booked in the com­pa­ra­ble year-ago pe­riod.

China Bank said its net in­ter­est in­come — which in­cludes prof­its from loans, and trad­ing and in­vest­ment se­cu­ri­ties, among oth­ers — grew 16% to P14.26 bil­lion.

Its gross loans port­fo­lio “grew faster than the in­dus­try” to P434.81 bil­lion, up by 25%. Con­sumer loans ex­panded by 28%, while cor­po­rate loans jumped 32%, driven by a ro­bust pipe­line and re­flect­ing strong cor­po­rate de­mand.

To­tal de­posits in the bank also rose 22% to P578.04 bil­lion, backed by 25% growth in low-cost cur­rent and sav­ings ac­count (CASA) de­posits. CASA ra­tio im­proved to 52.94%, while loans-to-de­posit ra­tio stood at 74.31%. China Bank said this is a “re­flec­tion of the bank’s fran­chise strength boosted by de­posit growth from new branches.”

Mean­while, China Bank’s non­in­ter­est in­come also grew by 17% to P4.90 bil­lion even as it saw a P611.43-mil­lion drop in its trad­ing gains.

The bank’s core op­er­at­ing in­come, ex­clud­ing trad­ing gains and non-re­cur­ring in­come, grew by 19% from last year, driven by a “ro­bust growth in re­cur­ring in­come” from ser­vice charges, fees from in­vest­ment bank­ing and trust, as well as in­come from as­set sales.

China Bank’s non-per­form­ing loan (NPL) ra­tio stood at 1.76%, as NPLs dropped by P700 mil­lion against last year. The lender’s con­sol­i­dated NPL cov­er­age ra­tio also im­proved to 91.29% from last year’s 86.57%, with the par­ent bank’s ra­tio at 141.62%.

The bank’s to­tal as­sets, mean­while, ex­panded by 23% to P692.74 bil­lion.

To­tal cap­i­tal stood at P82.38 bil­lion, up by 29%. China Bank’s cap­i­tal ad­e­quacy ra­tio was at 13.85%, while com­mon eq­uity Tier 1 ra­tio was at 14.65%, well above the reg­u­la­tory min­i­mum.

Con­sol­i­dated re­turn on eq­uity was at 10.41% and re­turn on as­sets was 1.16% as of Septem­ber.

“China Bank con­tin­ues to de­liver pos­i­tive re­sults on the back of strong growth in our core bank­ing busi­nesses,” newly- minted China Bank Pres­i­dent Wil­liam C. Whang said. Mr. Whang as­sumed the po­si­tion last Nov. 1.

“The better- than- ex­pected re­sults re­flect the fruits of our sig­nif­i­cant strate­gic ini­tia­tives since we be­gan our ex­pan­sion phase 10 years ago with the Manila Bank ac­qui­si­tion,” Mr. Whang noted.

The of­fi­cial said China Bank had 569 branches as of Septem­ber, with 158 branches of China Bank Sav­ings, its thrift bank­ing arm.

“The sav­ings bank sub­sidiary has turned around to full prof­itabil­ity in 2016 and is in a better po­si­tion to sig­nif­i­cantly con­trib­ute to the growth in cus­tomer base and rev­enues,” Mr. Whang said.

“On the other hand, China Bank Cap­i­tal [Corp.] con­tin­ued to be a ma­jor player in the cap­i­tal mar­kets, with China Bank Se­cu­ri­ties [Corp.] com­plet­ing our fullser­vice ca­pa­bil­ity high­lighted by our first IPO (ini­tial pub­lic of­fer­ing) for Ea­gle Ce­ment [Corp.],” he added.

China Bank shares closed at P33.50 each yes­ter­day, gain­ing 10 cen­tavos or 0.30% from the pre­vi­ous day’s fin­ish.

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