China Banking Corp., the eighth-largest lender in terms of assets, said Monday net income in the first quarter rose 6 percent to P1.47 billion from a year ago, led by the strong growth in lending and core fee-based income.
“Our strategic focus to strengthen our core businesses and diversifying our fee-based revenues in the midst of our network expansion are starting to produce encouraging results,” China Bank president and chief executive Ricardo Chua said in a statement.
Operating income increased 7 percent in January to March to P5.66 billion from the same period last year. Net interest income rose 14 percent to P4.47 billion, driven by the 16-percent growth in gross loan portfolio.
Non-interest income, excluding trading gains, grew 22 percent to P1.08 billion from the gain in service charges, fees from bancassurance, investment banking and trust and income from asset sales.
Core recurring income, or operating income excluding trading gains, went up 15 percent to P5.55 billion from P4.80 billion in the first quarter of 2016.
Operating expenses rose 8 percent to P3.88 billion amid the continued expansion in branch and distribution network and investments in people and technology to support the growth of new businesses.
Cost-to-income ratio was 66.37 percent versus 66.15 percent recorded in the first quarter of 2016. Return on equity and return on assets were at 9.15 percent and 0.93 percent, respectively.
Total assets increased 14 percent to P620.40 billion as of end-March, or P77.33 billion higher than the same period last year. The growth was driven mainly by the 16-percent growth in gross loan portfolio to P378.41 billion. Robust growth was registered across all market segments, such as consumer, commercial and corporate.
Total securities grew 42 percent to P101.08 billion as held-to-maturity securities increased 176 percent to P63.01 billion and accounted for the significant growth in the bank’s investment portfolio.
Total deposits grew 17 percent to P530.52 billion, supported by the 21-percent growth in low-cost current account-savings account deposits to P272.58 billion, reflecting the strength of the China Bank franchise boosted by deposit growth from new branches.
Casa ratio improved to 51.4 percent, while loans-to-deposit ratio stood at 70 percent. Total capital funds reached P64.91 billion, up 5 percent from the same period last year.
“We marked significant milestones in 2016: our investment banking arm China Bank Capital Corp. completing its maiden year of operations as market leader in retail bond issues, our thrift bank China Bank Savings turning around to full profitability, and significant growth achieved in all other major market segments,” Chua said.
China Bank recently raised P15 billion from a stock rights offering priced at P31 percent share to beef up its resources. The proceeds will be used to grow loan portfolio, expand branch network and support other strategic business initiatives.
China Bank Capital Corp., the investment arm of China Bank, acquired ATC Securities as its securities broker-dealer subsidiary company. As a wholly-owned subsidiary of China Bank Capital and a part of the China Bank group, ATC Securities will be renamed China Bank Securities Corp.