East West Bank’s income declines 22%
East West Banking Corp., the 12th largest lender in terms of assets, posted a 22-percent decline in net income in the first quarter to P945.4 million from a year ago, dragged down by securities trading losses.
The bank said in a statement the dismal three-month performance could also be attributed to the lower contribution from wholly-owned subsidiary EW Rural Bank.
It said net of EWRB and securities trading businesses, the other units combined net income increased 45 percent. Return on assets and return on equity were at 1.2 percent and 9.6 percent, respectively.
The Education Department effectively suspended new loans to teachers pending the renewal of the terms of the department’s Automatic Payroll Deduction System in November 2017. Bank officials said this heavily impacted EWRB because loans to public school teachers comprised its main business.
East West also incurred trading losses of P136.5 million in the first quarter, compared to a P166.5-million gain a year ago.
East West vice chairman and chief executive Antonio Moncupa Jr. said the biggest challenge for the bank this year was the settlement of the DepEd loans. “The bank believes that eventually, this will get settled and the bank will be paid on its existing portfolio. The bank, however, while still hoping for the best, is still evaluating if it can continue lending under the revised terms of the program,” Moncupa said.