CHINA BANKING Corp. (China Bank) saw its net income grow in 2017 on the back of sustained growth in its core and fee-based businesses.
In a disclosure to the local bourse on Friday, China Bank said it posted a consolidated income of P7.4 billion last year, 15% higher than the P6.5 billion it recorded in 2016.
China Bank said its net earnings translated to a 9.9% return on equity, or net income earned as a percentage of stockholder investment. Its return on assets, or net income as a percentage of total assets, stood at 1.11%.
“2017 was a pivotal year in the transformation and development of the China Bank Group,” China Bank President William C. Whang was quoted as saying in the disclosure. “We grew as projected and I am pleased that our strong fundamentals and solid organic growth gave us the platform to meet the opportunities and challenges in 2018.”
The Sy-led lender’s net interest income rose 17% to P20 billion from the P16.7 billion recorded in a comparable year-ago period. This was driven by the 17% growth in its loan portfolio and its stable net interest margin of 3.09%.
Gross loans grew 16.7% to P454 billion from the P389 billion it booked in 2016 on the back of strong demand across all segments, particularly consumer loans and corporate loans, which grew 25% and 19%, respectively.
The bank maintained its asset quality despite the loan expansion. China Bank’s non-performing loans (NPL) 12%, leading to an NPL ratio of 1.4%, which it noted was “lower than the industry average.” Its NPL coverage ratio also improved to 97% from 91% previously on a consolidated basis.
Meanwhile, its total deposits climbed 17% to P635 billion, boosted by its new branches.
“Low-cost funds increased 24% to P343 billion and raised CASA (checking & savings accounts) ratio to a healthy 54%, while the loans-to-deposit ratio was steady at 71%,” the lender said in the disclosure.
Non-interest income grew 20% to P6 billion on the back of higher service fees and commissions, trust revenues, foreign exchange gains, as well as income from acquired assets.
Excluding trading gains and non-recurring income, China Bank’s core operating income grew 18%, driven by its core business and the improvement in the contribution of subsidiaries.
China Bank Savings, its thrift banking arm, tripled its net income last year, the parent bank noted. China Bank Capital, the lender’s investment house, recorded a 25% earnings growth from increased participation in capital market deals.
Overall, the lender’s assets grew 19% to P752 billion alongside the growth of its core businesses.
Total capital funds grew 32% to P84 billion following its P15-billion stock rights offer conducted in May.
China Bank’s total capital adequacy ratio — a measure of the bank’s financial strength — stood at 13.47%, above the central bank’s 10% minimum requirement. Its common equity Tier 1 ratio of 14.23% also exceeded the minimum ratio of 6%. — KANV