China Banking Corp. said Thursday net income in the first six months rose 7 percent year-on-year to P10.8 billion on higher revenues and lower provisioning.
ChinaBank said in a statement the first-half performance translated into a return on equity of 15.9 percent and a return on assets of 1.6 percent.
It said second-quarter profit climbed 16 percent to P5.8 billion from P5.0 billion in the first quarter.
Revenues rose 8 percent year-on-year in the first half to P27.2 billion. Net interest income went up 16 percent to P25.5 billion as the robust growth in top line revenues offset the surge in interest expense.
“Our customer focus and disciplined operational execution enabled us to continue to deliver strong results to all our stakeholders,” Chinabank president and chief executive Romeo Uyan Jr. said.
Chinabank chief finance officer Patrick Cheng said their balance sheet was in great shape, with an improved liquidity ratio of 45 percent.
“The strength of our balance sheet means we are well placed to take advantage of the growth opportunities, deliver sustainable returns to our shareholders, and more importantly, continue supporting our customers and the broader economy,” Cheng.
The bank booked P878 million in provisions for loan losses, or 47 percent lower than a year ago, amid the economy’s continuous recovery from the pandemic. Non-performing loan cover remained sufficient and above industry at 122 percent.
Continued heavy investments on human resource development and digital innovation, along with higher volume and revenue-related taxes, led to a 22-percent increase in operating expenses to P13.6 billion. Cost-to-income ratio remained healthy at 50 percent.
Total assets rose 15 percent to P1.4 trillion, keeping its position as the fourth largest among private domestic banks.
Net loans rose 11 percent to P726 billion on stronger demand from the consumer sector. Despite the solid loans growth, asset quality remained stable, with NPL ratio easing to 2.2 percent, which was lower than the latest industry average.
Total deposits grew by 19 percent to P1.1 trillion. CASA ratio dropped to 49 percent due to the growth in term deposits year-on-year.
Total capital climbed 9 percent to P139 billion, with common equity tier 1 ratio and total capital adequacy ratio at 15.2 percent and 16.1 percent, respectively, both above the minimum regulatory requirements. Book value per share grew 9 percent to P51.48.
Moody’s recently affirmed Chinabank’s investment grade credit rating with a stable outlook. In its July 28, 2023 report, the international credit watchdog noted that “the Baa2 deposit and issuer ratings are driven by the bank’s strong capitalization and profitability; as well as its modest deposit franchise, offset by its strong level of liquidity.”
The ratings also factored in a one-notch uplift to its baa3 Baseline Credit Assessment to reflect the moderate probability of support from the government.