East West Banking Corp. (EastWest Bank) saw its net income decline in the first half of the year following the suspension of the public school teachers’ salary loan program.
In a regulatory filing Tuesday, Aug. 14, the Gotianun-led bank posted a net income of P2.2 billion in the six months ending in June, down 11% from the P2.5 billion recorded in the same period last year.
EastWest Bank attributed the decline mainly to the “adverse development” on its wholly-owned subsidiary EastWest Rural Bank (EWRB).
EWRB is primarily focused on public school teachers’ salary loan under the Automatic Payroll Deduction System of the Department of Education (DepEd). However, this was suspended until June as DepEd worked on new guidelines.
With this, the total impact in the first half of the year is estimated at around P600 million.
Likewise, the lender’s net income declined by a percent to P1.28 billion in the second quarter from the P1.29 billion in a comparable year-ago period. — Karl Angelo N. Vidal