China Banking Corp. said it booked a 19.8% increase in net profit in 2020, with the low-interest environment driving solid growth in net interest income by reducing the payout to depositors, and with strong trading gains also boosting the bottom line.

Net profit came in at P12.071 billion for the year, from P10.074 billion in 2019, according to the bank’s audited financial statements filed with the bourse Friday.

Net interest income – the difference in the interest a bank earns from assets such as loans and the interst it pays out in liabilities like deposits – increased 30% to P33.842 billion, despite an overall decline of 1.1% in interest income to P47.137 billion, which the bank said was due to a decline in loans and receivables. The 39% decline in interest expenses more than offset the modest decline in interest income.

Operating income rose 27.5% to P43.853 billion after trading and securities gains rose 266% to P3.23 billion.

Operating expenses rose 32.7% to P30.391 billion as provisioning for likely loan losses rose 244% to P8.86 billion.

The bank’s capital stood at P96.736 billion, up 11%. The capital adequacy ratio was 14.73% while its common equity Tier 1 ratio was 13.82%, both exceeding the regulatory minimums.

Last week, China Bank raised P20 billion from an issue of three-year bonds, which will fund its expansion program and other strategic initiatives.

China Bank closed at P24.10 on Friday, up 25 centavos or 1.05%. — Luz Wendy T. Noble