China Bank sees net income rise by 10% at end-Sept.

CHINA BANKING Corp.’s (China Bank) net income climbed by 10% in the first nine months amid continued growth in its core businesses and as it earmarked lower loan loss provisions.

The Sy-led bank booked a net profit of P16.2 billion at end-September, it said in a disclosure to the local bourse on Tuesday.

This translated to a return on equity of 15.6% and a return on assets of 1.6%.

For the third quarter alone, the bank’s net earnings climbed by 16% year on year to P5.4 billion.

The bank’s financial statement was unavailable as of press time.

“China Bank’s sustained growth reflects the successful execution of our business strategies. Despite the current high interest rate environment, we continue to grow our bottom line by preserving our margins, managing our overall costs effectively, and bringing greater efficiencies to our operations with technology,” China Bank President and Chief Executive Officer Romeo D. Uyan, Jr. said.

China Bank’s net interest income grew by 16% to P39.2 billion in the first nine months even as interest expenses nearly tripled as revenues surged by 44%.

Its net interest margin stood at 4.2%.

“Operating expenses increased by 14% to P20.5 billion, driven by higher manpower and inflation-related expenses and bigger volume and revenue-related taxes,” China Bank said.

Cost-to-income ratio was at 50%.

Gross loans grew by 10% year on year to P765 billion as consumer loans increased by 19% as teachers’ loans and credit cards rose, the bank said.

Its nonperforming loan (NPL) ratio was at 2.2%, with NPL cover at 126%.

China Bank set aside lower loan loss provisions at end-September at P1.3 billion.

On the funding side, total deposits increased by 14% to P1.1 trillion with a current and savings account or CASA ratio of 49%.

China Bank’s assets grew by 11% year on year to P1.4 trillion at end-September.

Total capital increased by 7% to P141 billion.

The bank’s common equity Tier 1 ratio was at 14.9% while its capital adequacy ratio stood at 15.8%, above the central bank’s minimum requirements.

“Our balance sheet remains strong. A quality loan book has helped us during a period of rising interest rates. We also continued to optimize our capital structure, maintaining strong capital generation and asset quality,” China Bank Chief Financial Officer Patrick D. Cheng said.

The bank’s closed unchanged at P30.40 apiece on Tuesday. — AMCS