China Bank posts lower in­come at end-Sept. as rev­enues drop

Business World - - Banking&finance - T. Lopez Melissa Luz

CHINA BANK­ING Corp. (China Bank) saw its net in­come slip as of end-Septem­ber, bogged down by lower non-in­ter­est rev­enues de­spite higher loans booked dur­ing the pe­riod.

In a dis­clo­sure, the Sy-owned bank re­ported a P5.56-bil­lion bot­tom line for the first nine months, 2.1% lower than the P5.68 bil­lion net profit dur­ing the com­pa­ra­ble pe­riod in 2017.

China Bank saw its con­sol­i­dated op­er­at­ing in­come pick up to P20.72 bil­lion, up by eight per­cent year-on-year as core busi­nesses con­tin­ued to grow.

This was driven by a 16% in­crease in loans, which reached P507.83 bil­lion as of Septem­ber. In par­tic­u­lar, loans granted to the re­tail seg­ment surged at a faster 19% climb.

Earn­ings from loans and in­vest­ments also pushed China Bank’s net in­ter­est in­come by a fifth to hit P17.08 bil­lion. Yearto-date net in­ter­est mar­gin like­wise im­proved to 3.17%, which came at a time of ris­ing in­ter­est rates.

De­spite brisker lend­ing ac­tiv­ity, the bank saw a lower share of prob­lem loans at just 1.23% of its port­fo­lio com­pared to a 1.76% share a year ago.

On the other hand, non-in­ter­est rev­enues dropped by 26% to set­tle at P3.64 bil­lion. These cover ser­vice fees and com­mis­sions, as well as trad­ing and one­off gains.

Gross prof­its were partly off­set by op­er­at­ing costs, which amounted to P13.11 bil­lion.

Still, bank as­sets ex­panded to P816.2 bil­lion led by a 20% in­crease in de­posits. More than half of China Bank’s P691.66 bil­lion de­posit base came from low-cost ac­counts, which grew at a faster 29% pace, the lender said in the dis­clo­sure.

China Bank said it has enough buf­fers against a fund­ing crunch, with a to­tal cap­i­tal ad­e­quacy ra­tio of 13.02%, high-qual­ity tier 1 cap­i­tal at 12.29%, and loan loss cov­er­age at 121%.

China Bank is the sev­enth-big­gest lender in the Philip­pines as of June, ac­cord­ing to the Bangko Sen­tral ng Pilip­inas. The bank, to­gether with its thrift bank­ing unit China Bank Sav­ings, runs 616 branches and 949 au­to­mated teller ma­chines na­tion­wide.

The lender re­cently teamed up with the In­ter­na­tional Fi­nance Corp. to float up to $150 mil­lion worth of green bonds, which will fund en­vi­ron­ment-friendly projects.

Shares in China Bank closed at P28 each on Thurs­day, up 15 cen­tavos or 0.54%. •

Newspapers in English

Newspapers from Philippines

© PressReader. All rights reserved.