China Bank net profit rises
CHINA BANKING Corp. (China Bank) posted double-digit net income growth in the first quarter on the back of its strong core businesses.
In a disclosure to the local bourse on Thursday, China Bank said its net income jumped 19% year on year to P2.2 billion in the January-March period, translating to a return on equity of 9.15% and return on assets of 0.92%.
The lender’s net interest income surged 34% year on year to P7.9 billion in the first quarter while its net interest margin inched up to 3.82% from 3.32%, previously.
China Bank said the rise in its net interest income was mainly due to higher revenues it had from “earning assets and lower interest expense, which dropped 23%.”
Meanwhile, the bank’s fee income declined to P1.2 billion as weak market conditions affected its trading activities.
Its total operating income rose 26% to P9.1 billion in the first quarter from the year prior.
The bank said strong demand across all segments drove its gross loan portfolio rise to P592 billion in the first quarter, up 15% year on year.
Despite higher loans, China Bank’s nonperforming loan (NPL) ratio stood at 1.7% while the NPL cover was at 109%.
The bank increased its provisions by 51% on expectations of higher credit losses amid the coronavirus disease 2019 (COVID-19) pandemic.
On the funding side, China Bank saw total deposits rise nine percent to P785 billion, causing its loans-to-deposit ratio to improve to 74%.
Meanwhile, operating expenses increased 22% to P5.8 billion “as the bank continued to strengthen and expand its operations and provided for COVID-19 related expenses.”
Still, its cost-to-income ratio improved to 64% from 66% in the same period last year.
The bank’s total capital reached P97 billion as of the first quarter, “with regulatory capital ratios well above regulatory levels.”
Its total assets increased 10% to P984 billion even as it scaled down operations in some of its branches in Luzon starting mid-March or when the enhanced community quarantine was implemented.
“The impact of the COVID-19 pandemic on our customers, employees, and society as a whole is a great concern for China Bank. We are committed to extend the help, support, and flexibility that our stakeholders need in these challenging times to ease the negative economic consequences of this global health crisis. We are also very grateful to our hardworking and dedicated frontliners who enable us to deliver on this vital commitment,” China Bank President William C. Whang was quoted as saying.
China Bank’s shares closed at P19.70 apiece on Thursday, down 0.1% or two centavos. — Beatrice M. Laforga
