EastWest Bank net income up 38% in 2019

EAST WEST Banking Corp. (EastWest Bank) saw its net income climb in 2019, boosted by both consumer loans and deposits.

In a disclosure to the local bourse on Friday, the lender said its net income climbed 38% to P6.2 billion in 2019, mainly fuelled by its consumer loan portfolio growth and low cost deposits.

“We are pleased to report our highest recorded income ever even as the bank faced a margin squeeze in 2019,” EastWest Bank Chief Executive Officer Antonio C. Moncupa, Jr. said in a statement.

Revenues also went up 13% to P28.7 billion from P25.5 billion in 2018. The bank said P2.2 billion of this increase came from net interest income, while the balance was comprised of fees, commissions, and fixed income trading gains, which inched up by a combined 16%.

Meanwhile, return on equity stood at 14%.

Net interest margin slipped to 6.9% from the 7.4% logged in 2018.

“Margins recovered to 7.6% in the last quarter from the 6.4% dip in the first quarter of 2019, where deposit costs went to record highs due to tight market liquidity,” the bank said, noting that both market liquidity and deposit costs were better in the last five months of 2019.

On the other hand, total deposits rose by 6% to P304.7 billion, backed by the 28% growth in current account and savings account deposits.

The bank’s total assets climbed by 11% to P406.3 billion in 2019.

“We expect a reversal in 2020 and recover a good part of the lost margins. Better global and domestic market liquidity should drive deposit costs lower,” Mr. Moncupa said.

The official said there could be risks from the coronavirus disease (COVID-19) outbreak, but is banking on the country’s being one of the “more resilient economies” in the region.

“We also expect our balance sheet to post decent growth as the country is expected to be among the more resilient economies even with COVID-19 and the resulting slowdown in the advanced economies and China,” Mr. Moncupa said.

EastWest Bank’s shares were steady at P10.70 apiece on Friday. — L.W.T. Noble