EastWest Banking Corp., the financial unit of Filinvest Development Corp. and one of the largest universal banks in the country, said net income in 2019 jumped 38 percent from a year ago to a record P6.2 billion, mainly driven by the growth of its consumer loans and low-cost deposits.
The bank said in a disclosure to the stock exchange Friday it maintained its top-tier position in profitability with return on equity at 14 percent.
“We are pleased to report our highest recorded income ever even as the bank faced a margin squeeze in 2019. We expect a reversal in 2020 and recover a good part of the lost margins,” EastWest chief executive Antonio Moncupa Jr. said in a statement.
He said better global and domestic market liquidity should drive deposit costs lower.
“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,” Moncupa said.
Net revenues rose 13 percent to ₱28.7 billion from ₱25.5 billion in 2018. Net interest income accounted for ₱2.2 billion of the ₱3.2-billion increase while the balance comprised of fees, commissions and fixed income trading gains that grew a combined 16 percent or by ₱1.0 billion.
Operating expenses, excluding provisions for losses, meanwhile, increased 8 percent to ₱16.4 billion in line with the growth of its earning assets.
Cost-to-income ratio improved to 57 percent from last years’ 60 percent. Provisions for losses rose 3 percent to ₱4.0 billion, slower than the 9-percent increase in its total loan portfolio.
Consumer loans climbed 14 percent. The bank remains the most consumer-centric universal bank, with consumer loans accounting for 73 percent of total loans.
Net interest margin stood at 6.9 percent for the full year, lower than the 7.4 percent it registered in 2018.