China Banking Corp., the eighth-largest lender in terms of assets, said net income last year surged 15 percent to P6.45 billion from a year ago, driven by sustained growth in core businesses.
China Bank said in a disclosure to the stock exchange Monday the full-year performance translated into a return on equity of 10.4 percent and a return on assets of 1.16 percent.
“Our 2016 results reflect the teamwork and dedication of everyone in the China Bank group to achieve significant growth in the major market segments – corporate, middle market and entrepreneurs – where we are traditionally strong and establishing a stronger presence in the consumer segment, and more recently in the capital markets,” China Bank president and chief executive Ricardo Chua said in a statement.
Net interest income grew 11 percent to P16.69 billion, on the back of a 12.5-percent increase in interest revenue from loans to P17.89 billion. Fee-based revenues improved 14 percent to P5.09 billion, bolstered by trading gains of P918.09 million, and robust growth in revenues from service charges and fees, trust fees and gains on sale of acquired assets.
Operating expense growth was limited to 7.9 percent even with the continued expansion in branch and distribution network and investments in people and technology to support the growth of new businesses.
Total assets jumped 20 percent to P633.2 billion, as loans and deposits grew faster than the industry. Gross loans rose 24 percent to P393.74 billion, led by the 27-percent growth in consumer loans.
Total deposits rose 23 percent to P541.6 billion, with the 21-percent growth in low-cost current and savings account deposits to P276.4 billion, boosted by deposit growth from new branches. Casa ratio stood at 51 percent, while loans-to-deposit ratio was 71.4 percent.
Subsidiary China Bank Savings achieved full-year profitability in 2016, following the successful integration in 2015 of Plantersbank, which was acquired in 2014, into CBS. China Bank Savings ended the year as the fourth largest thrift bank with P83 billion in assets and P58 billion in loans.
China Bank’s total capital funds reached P63.37 billion, resulting in healthy capital ratios with common equity tier 1 at 11.30 percent and total CAR at 12.21 percent.
China Bank is set to raise P15 billion in additional capital from a stock rights issue to support its growth strategy.