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China Bank profit climbs in 2018

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CHINA BANKING Corp. booked higher net income in 2018 propelled by the sustained growth of its core businesses.

In a regulatory filing Thursday, the Sy-led lender said it booked an P8.1-billion net profit last year, up 7% from the P7.4 billion tallied in 2017. This translated to a return on equity of 9.5% and return on assets of 1%.

China Bank attributed its higher net earnings in 2018 to “sustained strong growth of its core businesses,” with net interest income growing by 17% to P22.9 billion from P20 billion the previous year.

Its loan book reached P513 billion at end-2018, climbing 13% from P454 billion in 2017. This was led by the 20% expansion of its consumer lending segment as well as the 18% growth of its corporate loan portfolio.

“The growth in corporate loans was boosted by the robust investment banking activities of China Bank Capital which maintained its leadership in retail bond issues,” China Bank said.

China Bank Capital Corp. acted as a issue manager during the government’s sale of three-year retail Treasury bonds (RTB) in June 2018, where the state raised P121.765 billion. It is also acting as an issue manager for the government’s sale of RTBs this year, which will run until March 8.




Asset quality remained healthy as non-performing loans (NPL) declined by P240 million or 4%, improving its NPL ratio to 1.2%. The bank’s NPL reserve cover increased to 155%, with the ratio at the parent bank level even stronger at 306% from 175% in 2017.

On the funding side, the lender’s deposit base climbed 14% to P722.1 billion from P635 billion the previous year, boosted by a 17% increase in current and savings account deposits to P400.8 billion.

Excluding trading gains and one-off gains, China Bank’s fee-based revenues grew 16% as the growth in revenues from service fees, charges, commissions and the sale of acquired assets was tempered by the expected decline in trading and foreign exchange gains.

Operating expenses were at P18 billion — 13% higher excluding provisions for impairment and credit losses — on the back of continued expansion and investment.

China Bank’s total operating income reached P28.6 billion, up 11% from a year ago.

Total capital grew 5% last year to P87.8 billion, with its capital adequacy ratio and common equity Tier 1 ratio at 13.1% and 12.2%, respectively.

Overall, China Bank’s assets expanded 15% to P866.1 billion, buoyed by double-digit growth in loans and investment securities.

“We are gratified that we were able to sustain improvements in our profitability even as our expansion and strategic initiatives remain on track,” China Bank President William C. Whang was quoted as saying in the disclosure.

In July, China Bank raised P10.25 billion from the first tranche of its P20-billion long-term negotiable certificates of time deposit program, with the proceeds to be used to support the bank’s expansion and other initiatives.

China Bank shares closed at P27.65 each on Thursday, up 10 centavos or 0.36%. — Karl Angelo N. Vidal

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