High consumer lending boosts EW’S Q1 income

THE Gotianun-led East West Banking Corp. (PSE: EW) announced last Tuesday that its income for the first quarter of the year reached P1.7 billion, some 8-percent more than the previous year’s P1.57 billion, on higher consumer lending.

The consistent consumer lending expansion to start the year greatly contributed to a robust return on equity of 10 percent for the period, 52 basis points higher than end-2023.

Net revenues reached P10 billion, up by 28 percent from the same period last year from P7.8 billion, driven by net interest income growth of 34 percent to P8.2 billion.

This growth is largely attributed to the bank’s strategic emphasis on refined consumer lending strategies, which enhanced its lending processes, accounting for 81 percent of total loans and contributing to a net interest margin of 8.1 percent.

Non-interest income was at P1.2 billion, up 8 percent in line with banking transaction growth.

“Our robust start to the year is a clear indicator of the strategic direction we’ve set—to be one of the top consumer banks in the country. By focusing on the needs of our customers, we are not just responding to the market—we’re shaping it. This positions Eastwest as a formidable contender in the Philippine banking industry, ready to meet future challenges with agility and confidence,” EW President Jacqueline S. Fernandez said.

The operating expenses of the country’s 11th-largest bank by total assets rose by 22 percent to P5.8 billion. The opex increase, according to the lender, was driven by manpower and business-related expenses “to expand the bank’s balance sheet as well as investments in technology to allow for a more efficient delivery of services.”

Cost-to-income ratio of the bank improved to 58 percent in line with the industry, despite its predominantly-consumer portfolio.

Total loans and receivables also grew by 19 percent to P306.1 billion largely driven by the growth of consumer loans such as credit cards, auto, personal and salary loans.

Meanwhile, total deposits grew 12 percent to P356.6 billion.

Capital ratios stand at 13.5 percent and 12.7 percent for capital adequacy ratio and common equity tier 1 ratio respectively, well above the regulatory requirements.

“This reflects the bank’s commitment to delivering value to its shareholders and driving continued growth,” EW CEO Jerry G. Ngo said.

“We entered 2024 with strong momentum and a clear focus on enhancing our capabilities to better serve our customers. As we celebrate our 30th anniversary, we are driven by our commitment to exceed our customers’ evolving expectations, uniquely combining the warmth of Eastern hospitality with Western innovation to maintain our leadership in the competitive banking landscape,” Ngo added.