China Bank profit hits ₱4.9 B, declares ₱4-B cash dividend

China Banking Corporation (China Bank) reported a 37 percent jump in net profits to ₱4.9 billion in the first quarter of 2022 from ₱3.6 billion in the same period last year. In a disclosure to the Philippine Stock Exchange, the bank said the improved profitability, driven by sustained core business growth, yielded a higher return on equity of 16.0 percent and a better return on assets of 1.7 percent. Meanwhile, the bank’s Board of Directors declared a regular dividend ₱1.00 per share and an additional ₱0.50 per share special dividend, reflecting China Bank’s confidence in its underlying strength and future prospects. The total cash dividends of ₱4.04 billion is 50 percent higher compared to the ₱2.69 billion dividends paid last year and translates to a better cash dividend yield of 5.6 percent based on the bank’s closing price of ₱26.70 as of May 4, 2022. The cash dividends represent 27 percent of the full year 2021 net income of ₱15.1 billion. The dividends will be paid on June 3, 2022 to stockholders on record as of May 20, 2022. As the Philippine economy continues to recover from the Covid-19 pandemic, China Bank’s net interest income rose 15 percent year-on-year to ₱10.8 billion on the back of higher earning assets and lower interest expense. Net interest margin further improved to 4.3 percent.Meanwhile, lower trading gains compressed fee-based income to ₱1.7 billion, despite an 18 percent increase in service charges, fees, and commissions and a 22 percent jump in trust fees. Provisions for credit losses were reduced by 65 percent to ₱780 million, reflecting an improved macro-economic outlook. The resulting non-performing loan (NPL) coverage was higher at 119 percent. (James A. Loyola)