CHINA BANKING Corp. (China Bank) booked a 27% increase in its net earnings in 2022 as its operating income improved and as it managed its expenses.

China Bank said in a disclosure to the local bourse on Tuesday that it posted a net profit of P19.1 billion last year, up from P15.1 billion in 2021.

This translated to a return on equity of 15.1%, up from 13.6% a year prior, while return on assets also improved to 1.6% from 1.5%.

The bank’s financial statement was not available as of press time.

“Our sustained strong performance amid macroeconomic headwinds is a testament to our unwavering customer focus, effective management of assets, and good cost control,” China Bank President William C. Whang said.

The bank’s revenues rose by 14% to P55.7 billion from P48.7 billion, which it said was driven by the 17% increase in its net interest income to P45.6 billion from P39.1 billion.

“Interest income grew by 23% to P57.2 billion due to the continuous buildup in earning assets. Despite the 57% growth in interest expenses, the bank’s net interest margin remained healthy at 4.2%,” China Bank said.

Fee-based income also climbed 5% year on year to P10.1 billion, which the bank attributed to growth in income from deposit-related transaction fees, trust revenues, bancassurance revenues, and fees from its investment banking, stock brokerage, and insurance brokerage businesses.

Meanwhile, China Bank’s operating expenses grew by 9% to P24.4 billion due to increased revenue-related taxes amid its growth and higher core operating expenses due to inflationary pressures.

Despite the increase in expenses, its cost-to-income ratio improved to 44% last year from 46% in 2021.

The bank’s net loans rose by 15% year on year to P700 billion in 2022 as it disbursed more business and consumer loans amid the economy’s recovery.

Despite the growth of its loan portfolio, its nonperforming loan (NPL) ratio improved to 2.3% from 2.5%, and its NPL coverage ratio also increased to 123% from 116%.

On the funding side, deposits with the bank grew by 24% to P1.066 trillion from P863 billion. This, as its low-cost current and savings account (CASA) deposits rose by 3% to P573 billion for a CASA ratio of 54%, while time deposits climbed by 60% to P492 billion.

China Bank had total assets of P1.33 trillion at end-2022, up 20% from the year prior.

Total equity rose 13% to P135 billion. Its capital adequacy ratio (CAR) improved slightly to 15.9% in 2022 from 15.8%, while its common equity Tier 1 ratio rose to 15.1% from 14.9%, both above the regulatory minimum.

“China Bank continues to be strong and profitable, with ample liquidity and capitalization to achieve our ambitious goals, and more importantly, to deliver long-term, sustainable value to our stakeholders,” China Bank Chief Finance Officer Patrick D. Cheng said.

China Bank Chief Operating Officer and incoming President and Chief Executive Officer Romeo D. Uyan, Jr. said: “Our investments over the past years have started to bear fruit as evidenced by the record growth in assets and profits that we have been reporting. We also will keep on investing in our people and capabilities as China Bank continues to play an increasing role as one of the preeminent institutions in the Philippine banking industry.”

The lender has 641 branches and 1,045 automated teller machines nationwide to date.

China Bank shares went down by five centavos or 0.16% to end at P31.25 each on Tuesday. — A.M.C. Sy