CHINA BANKING Corp. (China Bank) saw its net income slip as of end-September, bogged down by lower non-interest revenues despite higher loans booked during the period.
In a disclosure, the Sy-owned bank reported a P5.56-billion bottom line for the first nine months, 2.1% lower than the P5.68 billion net profit during the comparable period in 2017.
China Bank saw its consolidated operating income pick up to P20.72 billion, up by eight percent year-on-year as core businesses continued to grow.
This was driven by a 16% increase in loans, which reached P507.83 billion as of September. In particular, loans granted to the retail segment surged at a faster 19% climb.
Earnings from loans and investments also pushed China Bank’s net interest income by a fifth to hit P17.08 billion. Year-to-date net interest margin likewise improved to 3.17%, which came at a time of rising interest rates.
Despite brisker lending activity, the bank saw a lower share of problem loans at just 1.23% of its portfolio compared to a 1.76% share a year ago.
On the other hand, non-interest revenues dropped by 26% to settle at P3.64 billion. These cover service fees and commissions, as well as trading and one-off gains.
Gross profits were partly offset by operating costs, which amounted to P13.11 billion.
Still, bank assets expanded to P816.2 billion led by a 20% increase in deposits. More than half of China Bank’s P691.66 billion deposit base came from low-cost accounts, which grew at a faster 29% pace, the lender said in the disclosure.
China Bank said it has enough buffers against a funding crunch, with a total capital adequacy ratio of 13.02%, high-quality tier 1 capital at 12.29%, and loan loss coverage at 121%.
China Bank is the seventh-biggest lender in the Philippines as of June, according to the Bangko Sentral ng Pilipinas. The bank, together with its thrift banking unit China Bank Savings, runs 616 branches and 949 automated teller machines nationwide.
The lender recently teamed up with the International Finance Corp. to float up to $150 million worth of green bonds, which will fund environment-friendly projects.
Shares in China Bank closed at P28 each on Thursday, up 15 centavos or 0.54%. — Melissa Luz T. Lopez