Finance


China Bank profit falls 18%




Posted on May 06, 2011


CHINA Banking Corp., (China Bank) the country’s eighth largest bank in asset terms, yesterday reported that earnings for the first quarter had declined by around 18% compared to a year ago due to lower trading gains and yields on securities.

A woman makes use of China Bank’s EZ pay tax payment machine in this file photo. -- BW file photo
But the bank, which saw its income rise by 22% to P5 billion last year, declared a hefty P12 per share cash dividend as well as a 10% stock dividend.

The Sy-led bank, in a statement yesterday said its net income for the first quarter came in at P866.98 million.

Loans rose, but the bank said “net interest income (net of loan loss provisions) [fell by] 1.6% due to lower yields, while trading gains were lower.”

This year, banks do not expect to earn as much as last year from their securities trading due to climbing inflation and interest rates.

“Our first quarter results, although lower than the previous year, was in line with our expectations,” Ricardo R. Chua, China Bank executive vice president and chief operating officer, was quoted as saying in the statement.

“Our budget numbers for the year have quarterly targets that are progressively higher during the year to reflect the build up of business volumes, especially loans in the succeeding quarters. We will work hard to meet our goals this year,” he added.

China Bank shares closed at P439.80 apiece yesterday, P1.80 lower than on Wednesday.

China Bank,which held its annual stockholders’ meeting yesterday, announced it was giving a P12 per share cash dividend to holders of around 107 million outstanding shares as well as a 10% stock dividend. Dividends are still subject to approval by regulators.

The cash dividend would amount to P1.287 billion, the bank said, eclipsing the P1.17 billion distributed in 2010.

“Based on China Bank’s share price of P434 at year-end 2010, the P12 cash dividend per share translates to an annualized dividend yield of 2.8%,” the bank said in the statement.

The bank also announced a reorganization in its board of directors, with Hans T. Sy and Gilbert U. Dee exchanging responsibilities. Mr. Sy, who used to be vice-chairman, now occupies the chairman’s seat, while Mr. Dee, who used to be bank chairman, is now vice-chairman.

Mr. Sy is the son of mall magnate Henry Sy, Sr., and is president of SM Prime Holdings, which runs the SM malls all over the country.

The Sys own a sizeable portion of China Bank through Sysmart Corp. and SM Investments Corp. -- A. R. R. Gregorio