China Bank profit up 19% to P2.2 B

Sy-led China Banking Corp. recorded a double-digit 19 percent rise in earnings to P2.2 billion in the first quarter from P1.9 billion in the same quarter last year, driven by the sustained growth of its core businesses amid the global health crisis.

China Bank president William Whang said the listed bank is committed to extend the help, support and flexibility that stakeholders need to ease the negative economic consequences of the coronavirus disease 2019 or COVID-19 pandemic.

“The impact of the COVID-19 pandemic on our customers, employees, and society as a whole is a great concern for China Bank,” Whang said.

The bank raised its provisioning by 51 percent to P412 million in the first quarter of the year from P273 million in the same quarter last year in anticipation of possible higher credit losses amid the pandemic.

The bank’s loan book went up by 15 percent to P592 billion from January to March compared to P515 billion, driven by strong demand across all customer segments.

Its non-performing loan (NPL) ratio stood at 1.7 percent from 1.2 percent, while NPL cover reached 109 percent from 169 percent.

On the funding side, China Bank’s deposit base increased by nine percent to P785 billion from P720 billion, translating to a higher loans to deposits ratio of 74 percent.

The bank’s total operating income jumped by 26 percent to P9.1 billion from P7.2 billion.

China Bank reported its net interest income surged by 34 percent to P7.9 billion in the first quarter from P5.9 billion in the same quarter last year on the back of higher revenues from earning assets and the 23 percent drop in interest expense.

This translated to an improved net interest margin of 3.82 percent from 3.32 percent.

Non-interest income slipped by 7.7 percent to P1.2 billion from P1.3 billion as weaker market conditions impacted the bank’s trading activities.

The country’s sixth largest lender in terms of assets reported a 22 percent jump in operating expenses to P5.8 billion as it continued to strengthen and expand its operations and provided for COVID-19 related expenses.

Nevertheless, it reported an improved cost-to-income ratio of 64 percent this year from a year ago level of 66 percent.