China Bank profit rises 14.5% in 2017
Driven by the sustained growth in core and fee-based businesses, Sy-led China Banking Corp. recorded a double-digit growth in earnings last year.
The bank said its net income amounted to P7.4 billion last year, 14.5 percent higher than the P6.4 billion recorded in 2016.
China Bank president William Whang said 2017 was a pivotal year in the transformation and development of the China Bank Group.
“We grew as projected and I am pleased that our strong fundamentals and solid organic growth gave us the platform to meet the opportunities and challenges in 2018,” he said.
The higher earnings translated to a return on equity (ROE) of 9.9 percent and return on assets (ROA) of 1.11 percent.
The bank’s net interest income went up by 17 percent year-on-year to P20 billion, driven by the 17 percent growth in loan portfolio and stable net interest margin of 3.09 percent.
China Bank’s loan book jumped by 16.7 percent to P454 billion last year from P389 billion in 2016 due to strong demand across all segments with consumer loans surging 25 percent and corporate loans rising 19 percent.
Despite the loan expansion, the bank maintained its asset quality with tighter loan monitoring and remedial efforts. Non-performing loans dropped by P900 million or 12 percent.
This led to an improved NPL ratio of 1.4 percent, lower than the industry average. The NPL coverage ratio likewise improved to 97 percent from 91 percent at the consolidated level, while at the parent bank level, it is even stronger at 169 percent from 153 percent.
Total deposits rose by 17 percent to P635 billion, boosted by the efforts of new branches. Low-cost funds increased by 24 percent to P343 billion and raised checking and savings accounts (CASA) ratio to a healthy 54 percent, while the loans-to-deposit ratio was steady at 71 percent.
On the other hand, noninterest income improved 20 percent to P6 billion due to higher service fees and commissions, trust revenues, forex gain, and income from acquired assets.
Core operating income, excluding trading gains & non-recurring income, grew by 18 percent, reflective of the strength of China Bank‘s core business drivers and the substantial improvement in the contribution of subsidiaries.
The bank‘s thrift banking arm China Bank Savings tripled its net income, sustaining the momentum of its turnaround to full profitability in 2016.
Meanwhile, its investment house subsidiary China Bank Capital recorded a 25 percent earnings growth from increased participation in capital market deals.
The group’s total asset base expanded 19 percent to P752 billion alongside the growth of core businesses while total capital funds jumped 32 percent to P84 billion with the P15-billion stock rights offer completed in May.