EAST WEST Banking Corp. (EastWest Bank) booked a double-digit growth in its bottom line in the second quarter to boost its first-half performance on the back of a surge in consumer loans, prompting the bank to raise its full-year profit target to P4.8 billion.

In a disclosure to the local bourse, the Gotianun-led bank reported a P1.29-billion net income for the second quarter, up 66.45% from the P776.56 million recorded in the same period in 2016.

Net interest income in the three months ended June totalled P4.47 billion, climbing from the P3.73 billion posted in the same period a year ago. Meanwhile, total operating income came in at P6.05 billion, up from the previous year’s P5.301 billion. On the other hand, total operating expenses for the quarter stood at P4.16 billion, declining from the P4.26 billion recorded in the same period last year.

EastWest Bank’s strong second-quarter performance brought its first semester earnings to P2.502 billion, up 60% from the P1.563 billion booked during the comparable period in 2016. Total loans grew by 19% from a year ago to reach P212 billion as consumer lending jumped by a third.

Retail loans rose to P150.3 billion at end-June from P111.9 billion during the same year-ago period, which offset a 6% decline in corporate loans amounting to P61.6 billion, according to the bank’s quarterly report filed at the Philippine Stock Exchange.

The bank saw its net revenues rise by 16% to P12.1 billion year-on-year, even as income from trading gains plunged by 71% to P262.6 million from P918.2 million. In particular, net interest income totalled P8.972 billion, up 22% from P7.348 billion as of June 2016.

Bank deposits totalled P254.9 billion during the first semester, posting a 24% growth from P206.3 billion the year prior. In turn, total assets climbed by a fifth to reach P309.6 billion from P257.4 billion a year ago.

On the other hand, the bank’s operating costs grew at a milder 14% pace to reach P6.5 billion, coming from last year’s P5.714 billion largely due to its issuance of new Europay Mastercard Visa cards to its clients ahead of the June 2018 deadline set by the regulator.

“The bank’s operating leverage continues to improve as we complete our store expansion program. Our businesses, particularly consumer loans and deposits, continue to post robust growth,” EastWest Bank President and Deputy Chief Executive Officer (CEO) Jesus Roberto S. Reyes was quoted as saying in the statement. He pointed out that core revenues grew twice as fast as the bank’s rising expenses.

With the bank’s stellar run during the semester, EastWest said it stands assured of a P4.8-billion net income for the entire year, higher than the previous P4.25-billion projection.

“Income growth will likely be higher than 25%. Based on the first half 2017 results and the trajectory of our businesses, we have a chance to end 2017 with above industry average return on equity,” EastWest Vice-Chairman and CEO Antonio C. Moncupa, Jr. was also quoted as saying.

The bank said its return on equity improved to 14.1% from 9.8%, while return on assets rose to 1.7% from 1.3% previously.

Capital buffers stood at 13.7% relative to risk weighted assets, well above the central bank’s 10% standard although lower than the 14.2% ratio posted in June 2016.

As of June, the bank runs 389 branches and 576 automated teller machines nationwide.

EastWest shares rose to end at P32.95 apiece yesterday, 2.49% higher than P32.15 on Tuesday. — Melissa Luz T. Lopez

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