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Friday, March 29, 2024

EastWest Bank’s income jumped 60% to P2.5b in first half

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East West Banking Corp., the financial arm of the Filinvest Group, said Wednesday net income in the first half jumped 60 percent to P2.5 billion from a year ago on sustained growth of core businesses.

EastWest vice chairman and chief executive Antonio Moncupa Jr. said the first-half performance was aligned with the bank’s income guidance of at least P4.8 billion for 2017.

“We will be sad if our 2017 income is less than P4.25 billion, or 25 percent better versus the P3.4 billion we booked in 2016,” Moncupa said in a statement.

 “It now appears that we will not be sad. Income growth will likely be higher than 25 percent. Based on the first half 2017 results and the trajectory of our businesses, we have a chance to end 2017 with above industry average return on equity. We are now looking at 2017 full-year income of at least P4.8 billion,” Moncupa said. 

The net profit booked in the first six months sustained the 70-percent and 54-percent growth in 2016 and first quarter of 2017, respectively.

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Total assets grew 20 percent to P310 billion, driven by the growth in loan portfolio. Total loans increased 19 percent to P212 billion, led by the 34-percent growth in consumer loans. Consumer loans accounted for 71 percent of the bank’s total loans.

EastWest maintained its industry leading net interest margin of 7.8 percent. Interest margin net of provisions for loan losses, a metric that makes comparison among banks more meaningful, was at 6.1 percent for the period. 

Net interest margin net of provisions for loan losses of listed universal and commercial banks stood at 3.3 percent  in 2016.

Deposits increased 24 percent to P255 billion as of end-June.

“The bank’s operating leverage continues to improve as we complete our store expansion program. Our businesses, particularly consumer loans and deposits, continue to post robust growth. On the other hand, credit costs tapered off as asset expansion were more on secured and lower credit cost sectors,” said EastWest president and deputy chief executive Bobby Reyes.

“Our first-half trading revenues was not as good as we hoped. We are happy though that our core recurring income has more than made up for the lower trading revenues. Our core revenues are improving at double the pace of the increase in operating expenses,” Reyes said.

The bank’s return on equity improved to 14.1 percent from 9.8 percent in 2016. Return on assets was at 1.7 percent compared to the 1.3 percent booked last year.

Net revenues increased 16 percent to P12.1 billion year-on-year, even as net revenues before trading income was 25 percent better.

East West registered a 67-percent increase in auto loans business last year.

The bank is also now among the biggest credit card issuers in the industry after the recent migration of the retail banking business of Standard Chartered Bank Philippines to East West in the latter part of November 2016.

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