East West Bank books 54% higher income

East West Banking Corp., the banking arm of the Gotianun Family, reported a 54 percent increase in net income in the first quarter, driven by robust lending business.

In a financial report to the Philippine Stock Exchange, EastWest said its net income jumped to P1.2 billion in the first three months from P786.6 million in the same period last year.

Total revenue grew 18 percent to P6 billion from P5.1 billion a year ago, while core revenue, or income after taking out volatile trading profits, grew 26 percent to P5.9 billion.

EastWest vice chairman and chief executive officer Antonio Moncupa Jr. said the bank’s financial growth was driven by the bank’s store expansion plan it implemented a few years ago.

“As we have said previously, we expect to see steady increase in productivity after we have completed our expansion and as our stores mature,” Moncupa said.

The bank has almost tripled the number of its branches from 168 in 2011 to the current 446 stores.

Moncupa is optimistic of further growth this year, projecting a 25 percent increase in net income for this year.

“We expect revenue growth to continue besting increases in costs. At the rate we are going, a 25 percent increase in income this year to around P4.25 billion is doable,” Moncupa said.

Last year, the bank’s net income surged 70 percent to P3.4 billion from P2 billion in 2015.

Apart from its branch expansion efforts, EastWest also attributed its growth to robust loan business, particularly consumer loans, which grew 43 percent year-on-year, mainly driven by auto, mortgage and personal loans.

“Credit cards, which remains to be the highest contributor for consumer lending’s bottom-line, also grew significantly by 25 percent to P27.5 billion largely due to the acquisition of Standard Chartered Bank’s retail business in late 2016,” EastWest said.

In contrast, trading revenues dropped 63 percent to P166.5 million from the P449.7 million last year.

“We are a true retail bank where income comes from the old-fashioned loans and deposits business, and not from volatile trading revenues. This means that our business is focused on serving customers well. We are convinced that’s the way to go,” Moncupa said.

Moreover, the bank’s total deposits increased 26 percent year-on-year to P237.9 billion, led by the 32 percent growth in low cost CASA deposits.

Total assets as of the end of the first quarter stood at P239 billion, 22 percent higher from last year’s figures.

EastWest is the banking subsidiary of listed holding firm Filinvest Development Corp.