CHINA BANKING Corp. (China Bank) saw its net income rise by 7% in the first half amid higher revenues and as it set aside lower loan loss provisions, it said on Thursday.

The bank’s net profit climbed to P10.8 billion in the first semester from P10.1 billion in the same period last year, it said in a disclosure to the local bourse.

Its first-half performance translated to a return on equity of 15.9% and a return on assets of 1.6%, down from 16.4% and 1.7%, respectively.

For the second quarter alone, its net profit stood at P5.8 billion.

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

“Our customer focus and disciplined operational execution enabled us to continue to deliver strong results to all our stakeholders,” China Bank President and Chief Executive Officer Romeo D. Uyan, Jr. said.

In the first half, the bank’s net interest income stood at P25.5 billion, up by 16% from P22 billion in the same period last year. This came on the back of a 46% increase in interest earnings to P37.9 billion, which offset a 218% rise in interest expenses to P12.3 billion.

Its net interest margin was at 4.2% in the first half, down from 4.3% a year ago.

Meanwhile, China Bank’s fee income dropped by 48% year on year to P1.7 billion in the period.

The bank’s total revenues stood at P27.2 billion in the first semester, up by 8% year on year.

On the other hand, operating expenses rose by 22% to P13.6 billion amid “continued heavy investments on human resource development and digital innovation, along with higher volume and revenue-related taxes.”

The bank’s cost-to-income ratio was at 50%, higher than the 44% seen a year prior.

China Bank’s net loans rose by 11% year on year to P726 billion in the first half as consumer loans went up by 20% and business loans climbed by 8%.

Despite the growth of its loan portfolio, the bank’s nonperforming loan (NPL) ratio went down to 2.2% from 2.3% a year prior.

NPL cover was at 122%, down from 128% a year ago, as the bank set aside loan loss provisions worth P900 million in the first half, down by 47% from P1.7 billion in the same period last year.

On the funding side, total deposits grew by 19% to P1.12 trillion from P945 billion in the first half of last year.

“CASA (current account and savings account) ratio dropped to 49% due to the growth in term deposits year on year,” China Bank said.

Total assets stood at P1.39 trillion at end-June, up by 15% year on year.

The bank’s equity likewise grew by 9% to P139 billion.

Its capital adequacy ratio stood at 16.1% as of June, up from 15.7% a year prior, while its common equity Tier 1 ratio was at 15.2%, also higher than the 14.8% seen last year.

China Bank has 643 branches and 1,062 automated teller machines to date, including those of its thrift arm China Bank Savings, Inc. (CBS).

The bank’s board of directors on Wednesday approved a P2-billion capital infusion into CBS, it said in a separate disclosure on Thursday.

The funds will be used to “support CBS’s sustained loan expansion and enhance its ability to cover and serve more segments of the banking and unbanked population.”

China Bank’s shares closed unchanged at P31 each on Thursday. — A.M.C. Sy